Instagram struggling to deal with counterfeit luxury goods

This article is brought to you by Retail Technology Review: Instagram struggling to deal with counterfeit luxury goods.

Comment by Tosshan Ramgolam, Brand Advisor at Incopro, the online brand protection software provider. 

The research from Ghost Data shows incredible detail. The research team scanned around four million Instagram posts, identifying more than 56,000 accounts involved in counterfeiting activities – more than double the 20,000 accounts the same group found in 2016.

For each luxury brand’s hashtag, around 15 percent of posts were generated by accounts dedicated to illegal counterfeiting activities.

The signs show that Instagram may be struggling to clamp down on the levels of abuse on its platform by groups of organised criminals. It’s not surprising to see more luxury brands frustrated – not just because it’s so easy to find these accounts, but also because of the lack of proper response to these threats.

Instagram is not alone in this problem, with the likes of Amazon and Facebook having faced the same issues in the past. The problem of counterfeits sold through online marketplaces has become so bad that some major brands refused to let their wholesalers sell their products through these platforms.

But social media has now become the bigger problem, arguably overtaking online marketplaces as the biggest platforms for the sale of fake goods. As luxury brands realised the power of sites like Instagram, so too have counterfeiters looking to hitch off the back of legitimate luxury goods. These users are enabled further by recent features such as Instagram’s “Shop Now” where posts can have listings and item details on the image itself and are directly linked to a store to purchase the product. 

Luxury brands suffer the most from these features. Their brand perception means their official channels for purchasing products are either entirely offline in bricks and mortars store, or if they are online, they’re limited to their own e-commerce sites. However, there is a demand for these products online, and while this may not be their target market and is dismissible by luxury brands, it only gives counterfeiters an easier platform to abuse. If luxury brands want to protect their brand equity and perception, co-operating with platforms such as Instagram is a necessity.

The article quotes Andrea Stroppa who flags that “Instagram is not very responsive.” Interestingly, in our experience with the 600+ brands we work with, Instagram has been very timely in responses. One of our Principal Analysts, Svetlana Ilnitskaya, quotes Incopro’s response time from Instagram being between 12-48 hours and our compliance rate with Instagram to be close to 99% for the take down of counterfeit issues on the platform – with 90% of accounts being closed. 

Of course, however there is more platforms can do to aid right holders in the identification, collection, and reporting of these infringements as the counterfeiting landscape evolves.

The issue that Ghost Data flags has significantly transformed far beyond user accounts selling counterfeit products. Social media sponsored adverts are now being abused, and the utilisation of bots to automatically create accounts at rapid rates are just a couple of the trends we’ve seen.

The sale of counterfeits is just another issue that social media companies are failing to deal with, sitting alongside terrorist propaganda, self-harm images, the spread of misinformation and many other examples. 

New proposals by the government could see social media sites fined or blocked if they’re seen as failing to tackle the problem, but the responsibility should already fall on their shoulders without the threat of legislation.

Automated, AI-based brand protection technology ensures that brands can prioritise the top offenders. By automating the enforcement process, luxury brand owners can save time and achieve impact on the problem. Using these tools in combination with smart automation is the best way to make a real difference.