Facebook parent company Meta is a hub for counterfeit goods. Fake items from Gucci to Chanel are rampant on their platforms and social media apps. A study by Ghost Data states that Meta’s apps continue to provide lucrative channels for selling counterfeit consumer goods around the world.
“Meta and its affiliates, in particular, have developed a strategy that increasingly aims to become a leader in e-commerce, thereby attracting a broader mass of unscrupulous counterfeiters. This, in turn, has further exposed Facebook’s inability to control such activity on its platforms. This controversial behavior led to an increase in the supply of fakes and eventually to a general distrust among users that continues to this day.”
Ghost Data first uncovered the issues in 2014, contributing to an NBC News report on fake sales on Instagram. In 2020, the company uncovered the sale of over 10,000 fake face masks on Instagram.
A booming trade
Global trade in counterfeit and pirated products was worth an estimated US$464 billion in 2019, about 2.5 percent of world trade, according to the latest data from the Organization for Economic Co-operation and Development (OECD).
Increase in counterfeits due to Covid-19
This growth is likely to have been further accelerated by the Covid-19 pandemic. Lockdowns imposed by governments and widespread consumer caution have significantly changed consumer behavior and led to a sharp rise in online retail. Counterfeiters have benefited from the increase in online sales, due in part to consumers not only choosing to shop online, but also buying a greater number of goods online than ever before. This has enabled the counterfeit trade to reach and deceive a larger number of people than in the past.
At the same time, the counterfeit trade has taken advantage of the disruptions in production and distribution that have led to widespread shortages of genuine goods, and has been able to fill glaring gaps in various products – albeit fake ones.
E-commerce is Meta’s top priority, according to Reuters. The company rolled out new shopping features designed to help it increase sales. Meta is under pressure from changes in ad tracking and a drop in usage, among other things. But users exploiting the platforms to sell counterfeit goods pose an ongoing problem for the company, which is also under scrutiny from legislation and regulators for its (lack of) content moderation.
“The sale of counterfeits and scams is a problem that keeps popping up with new technology,” Meta said in a statement. “We’re getting better at stopping these sales and fighting scammers every day,” the company added.
Traders in counterfeiting are finding new ways to disguise their identities and activities, the report says, making it difficult for brands to curb the activities.
Ghost Data uncovered 26,770 active counterfeiter accounts on Facebook over a 20-day period at the end of October 2021. The company also estimates that there are about 6,000 to 7,000 wholesalers from China on Meta (Facebook and Instagram) combined, generating between $1.8 billion and $2.1 billion in annual sales.
Counterfeiter Statistics
Fakes propagated via meta can easily reach 20 million users just through people “friends” with the fakers’ accounts. The vast majority of Instagram and Facebook fakers are from China – 65 percent (up from 43 percent in 2019) – followed by Russia (14 percent) and Turkey (7.5 percent).
The most commonly counterfeited brands are items from Louis Vuitton (nearly 6 out of 10), followed by Chanel (8.5 percent), Fendi (6.7 percent), Gucci and Prada (both over three percent).
LVMH Group items/brands account for approximately 67.8 percent of all fake goods footage posted. Far behind are Kering and Chanel, each with over eight percent, and the other groups together with around 15 percent.
Yupoo, a new visual platform that combines some features of Flickr and Pinterest, is currently the catalog system most used by counterfeiters. It’s a China-based service that allows people to easily create detailed albums (with pictures of zippers, stitching, labels, and so on) that can be shared over the web with a simple link. Ghost Data has identified over 6,500 unique links with more than two million images and videos of counterfeit items.
The report concludes that Meta’s security reports and legal initiatives impacting its alleged crackdown on these illegal activities are disappointing and inadequate. This seemingly unstoppable trend is causing a number of serious problems, including child labor, exploitation of women, toxic products, digital fraud, and the funding of criminal and terrorist organizations.
Article Source: Ghost Data “The Meta Counterfeiting Empire, A Global Threat Thriving on Today’s Social Media”
This article was previously published on FashionUnited.uk. Translation and editing: Barbara Russ.