Category: Online Brand Protection

This year’s holiday period will bring the busiest shopping season of the year including a growing portion of purchases made online, an environment ripe for counterfeiters and scammers to take advantage of buyers by pushing fake products or phishing for personal and financial information. The consumer product counterfeit business has evolved and grown from city sidewalks to the online global marketplace. We’ve listed below a few helpful tips to be mindful of this risk and potentially avoid purchasing counterfeit products online during this high-volume and often confusing purchasing season.

1) Check to Confirm the Shopping Website is Secure.

When purchasing items online, make sure you are only purchasing from trusted sources. By verifying the website is secure, you are less likely to deal with illicit sites either selling fake products or worse, looking to steal your personal and financial information. One method to verify you are more likely to be on a legitimate site is to check the web address bar, where you’ll find the fully expressed website domain address. If a site address begins with “https://” the “s” stands for secure. You should also see a padlock symbol at the top of your browser. While this isn’t 100% foolproof, if you don’t see these indicators, chances are you have stumbled into a non-secure and possibly illicit e-commerce site.

Another tip is to be cautious of sponsored search results on Google that can lead to little-known e-commerce portals. Sponsored content which typically appears higher up in a search result or sponsored content appearing on social media that targets consumers directly are not always trustworthy. It is also recommended to be cautious of sales offered on chat apps, email campaigns and short video apps. The original website of the brand owner should normally be the first port of call, followed by the reputed e-commerce websites. On reputed e-commerce sites, use caution and evaluate the seller you’re buying from. For example, if you see a seller sell reputed brands alongside generic goods the products will most likely be fake.

2) Evaluate if the E-Commerce Site Shows the Warning Signs of Highly Discounted and Unrealistic Offers.

Many brands are often impersonated online by websites offering large price savings or special onetime deals. Be cautious of websites offering retail pricing at substantial discounts from the manufacturer’s suggested retail price. A deal that seems too good to be true probably is. Often these illicit trading sites need to use these pricing and promotional tactics to attract the web traffic and entice shoppers to navigate and purchase fake or unauthorized goods. Google Transparency Report and Scam Advisor are helpful sources to view a site’s legitimacy. We also recommend never purchasing anything online with terms of purchase not allowing returns and stating all sales are final.

Another rule of thumb to verify if the site is more likely selling legitimate product is to check the brand owner’s official, authorized website and compare the standard retail price offered on the same product against the price quoted on the questionable site. Often, discounts of 30% or more for premium branded products should be suspect. Also, check the brand owner’s official site for any mention of similar deals or a list of authorized distributors/dealers. If you’ve ordered and received product under these questionable circumstances, it is important to always inspect the products fully and compare the product’s appearance to the legitimate images on the brand owner’s site. It is also important to check all packaging, missing or expired dates or broken/non-existent safety seals. If you discover inconsistencies and suspect you’ve received a fake product, be wary of using it, especially if the failure of the product could result in your own bodily harm. It might be time to request a refund and/or report the purchase to the authorized brand owner.

3) Refer to Legitimate Verified Buyer’s Reviews as a Potential Credibility Builder.

If the shopping site you’re visiting is credible, there should be substantial and believable third-party reviews from multiple verified buyers. Make sure to browse several consumer reviews to verify the content is believable and visit other review sites such as Google My Business and Yelp to review the seller’s reputation and any negative customer experience feedback that’s already out there. Sometimes, rogue traders try to plant fake reviews with glowing praise. Thus, it may also help to sort reviews by low to high rating, and quickly check if any customer has complained of the product being substandard or even suspecting it to be counterfeit.

Many Brand Owners Work Diligently to Protect Their Brand’s Online Credibility

Authentix provides some of the world’s most recognizable brands with sophisticated online brand protection tools and services to address a broad range of online infringement and counterfeit risks. From global online surveillance and enforcement, online investigations and site takedowns, target verification, and even offline investigations, Authentix helps major brands to proactively reduce the threat of unauthorized or outright fake product hitting the online marketplaces.

If you’re a brand owner and curious how Authentix Online Brand Protection can help protect against intellectual property infringement, schedule a consultation with our brand protection experts today.

By Bharat Kapoor, Vice President, Authentix Online Brand Protection

Partnerships between major brands and social media influencers are today de rigueur. Worryingly, however, the rise of influencer marketing has been accompanied by an unseemly trend of “influencer counterfeiting”, where a minority of unscrupulous influencers blatantly hawk fake goods on the internet. A recent survey, commissioned by the UK Intellectual Property Office and conducted by the University of Portsmouth, found that “deviant” social media influencers exert a significant influence on young followers, stating a host of alarming statistics.

While a reasonable amount of media coverage has been devoted to the trend of influencer counterfeiting, what is sometimes missed is that levels of respect for intellectual property can vary across social media platforms.  For example, Meta appears to have a fairly robust complaints mechanism, with approximately 80 percent of counterfeit-related complaint resulting in takedowns (per its transparency reports). Meta has also partnered with well-known brands and initiated legal action against counterfeiters (including, in one instance, a lawsuit jointly filed with Gucci in a US court). The same, however, is arguably less true for TikTok and its Chinese equivalent Douyin. Media reports, and our own enforcement experience, suggests that the extent of influencer counterfeiting on the platform is widespread and responses to takedown requests need to be improved. This also holds true for Telegram. Compounding the problem, Telegram offers users significant anonymity, thus potentially allowing rogue influencers to hide behind false identities and also evade offline enforcement actions.

Judicial precedents concerning influencer counterfeiting, and the obligations of social media platforms, remain few and far between. Late 2020, Amazon sued two influencers active on TikTok, Facebook and Instagram in the US, for allegedly working with a large network of counterfeiters to advertise and facilitate the sale of fake luxury products. The case, however, was ultimately settled on confidential terms.  In June 2022, Amazon and Cartier partnered to sue an influencer selling fake jewelery on Instagram. In contrast with the earlier case, the identity of the influencer was unknown and identified in court filings only by the handle “Phym9y3v”. While the outcome of the case is eagerly awaited, a recent precedent from the Delhi High Court in India is instructive. An English-language tutor, whose lectures and course materials were being uploaded and sold on Telegram without her permission, sued Telegram for copyright infringement. The plaintiff observed that she had sent takedown requests to Telegram, but new channels with the infringing content were popping up as soon as one was disabled.  Telegram contested the application on the ground that it was an intermediary and that its servers were located overseas, beyond the jurisdiction of Indian courts.  The court rejected Telegram’s arguments, observing that “conventional concepts of territoriality no longer exist” and that copyright enforcement “cannot be diminished merely due to the growth of technology, which has made it easier to hide and conceal illegal activities.” The court thus directed Telegram to disclose the mobile numbers, IP addresses and email addresses used to upload and disseminate the content, along with details of the servers and networks used.

The increase in influencer counterfeiting requires brand owners to pursue rogue influencers (both online and offline) and press for myriad forms of legislative intervention and diplomatic pressure, to truly reign in influencer counterfeiting and the platforms that facilitate it.

To learn more about Authentix online brand protection solutions, visit www.authentix.com/online-brand-protection.

By Bharat Kapoor, Vice President of Online Brand Protection, Authentix

With online sales continuing to surge, companies are focusing on digital marketing and advertising products through various social media channels.

Not only has there been a rapid shift towards sales through online channels as a result of Covid-19, with corporations such as L’Oréal for example reporting a 62% increase in online sales across divisions and regions, the marketing of products through influencers has also experienced a dramatic uptick with the influencer marketing industry estimated to be worth US$9.7bn in 2020.

However, according to a report published by Instagram, 20% of the posts associated with top brands on social media featured counterfeit or illicit content.

The way customers interact with brands has been changing over time with two factors driving that change. One is technology where you have omnichannel sales and you’re getting messaging from social media feeds, e-commerce, marketplaces, influencers and so on. Customers buying products online also have access to delivery infrastructures that haven’t before existed in the way they do today. For example, if you buy something on Amazon in Southeast Asia, Asia or the US, it can come to you within hours. And what counterfeiters really take advantage of is exactly that: they find places where it’s easy for them to promote and sell anonymously and use this delivery infrastructure that’s been created by other legitimate businesses who have invested billions and billions of dollars in e-commerce.

The second thing that is helping smooth the path for piracy are payment systems that make it possible to move funds cross-border seamlessly, which are often associated with e-commerce and the rise of China’s cross-border ‘daigou’ trade. Via this method, counterfeiters will attempt to use the pricing gap between retail prices and grey market products to sell counterfeits.

Today, with the various means of transacting, getting money from someplace in Europe into China is also instant. This type of financial structure unfortunately is geared up to benefit fraudsters.

What we’ve seen is cross-border e-commerce channels becoming extremely popular because they offer crazy discounts. These deals are backed by sellers in a foreign country that will be responsible for delivering the product once a transaction is completed. For example, we found and investigated sellers in Singapore that have no inventory and they simply place a back-to-back order when they receive an order. This makes it more complicated for the police to take criminal actions against such sellers.

For the cosmetics industry for example from a brand perspective, it’s not only about counterfeiting, which may be 30-40% of the issue. But you will also find infringers using other brand assets – films, photos, design patents, a wide spectrum of IP – to sell a particular product that could be a counterfeit, or even a lookalike product.”

Finding Out Who’s Selling Fakes

SIPI has a unique strategy for discovering the online vendors who are responsible for dealing in counterfeit products and those dealing in legitimate goods via its proprietary online monitoring and enforcement solutions. The aim is not only to protect clients’ brand image and copyright, but also their customers and reputation.

SIPI uses machine learning-based algorithms to scale up analysis and identify hidden trends in data gathered both online and offline to identify high-value targets.

The process begins with data gathering, in which SIPI scrapes data for clients’ brands from around 500 different e-commerce marketplaces and social media platforms. This data is fed into its online platform for risk screening and risk-scored by SIPI’s proprietary algorithms, under which over 30 parameters (including price, images, keywords, customer reviews and seller activity) are taken into account.

In terms of the algorithms, you must approach your research and your study of a potential infringinglisting by looking at the listing in the wider context. It is sometimes quite difficult to identify a counterfeit product just by looking at the listing, because legitimate brand owners may also sell their products at discounted prices. They have other channels and many other ways of selling. So, you can’t just say that the price of a product being 30% or 40% below average is, alone, an indication of it being counterfeit.

You must be more diligent in terms of your assessment of a seller. And that’s what SIPI has trained our algorithms to do – to know what else to look at online. For example, you can look at customer comments, store rating, how old the stores are and the types of products that you see the store selling, such as luxury goods alongside very generic products, which may be viewed as being suspicious.

To identify offline targets, high-risk sellers are further investigated to create seller and product clusters, the name for groups of sellers concentrated in a region or dealing in a single product. A complete digital profile is created for high-value targets after which these leads are shared with an offline investigator for further investigation and action. The remaining infringing listings are reported to the respective marketplaces and social media platforms for takedowns.

SIPI currently protects over 200 brands and maintains a 94% success rate across platforms. While it strives to have a 100% success rate, certain major marketplaces in China and Asia make it extremely difficult to file complaints against each and every counterfeit instance.

And it is not simply a case of either how sophisticated or poorly-made the fake products are as to whether these are blatantly obvious versions. There are multiple avenues for illicit commercial activity.

SIPI has noticed a sharp increase in the number of sellers claiming to manufacture products and supply packaging materials that support the counterfeiting trade. There are also cases of verifiable and legitimate products being sold illegally.

Looking Forward

Given the wider e-commerce environment playing so well into counterfeit sellers’ hands, we believe the combination of Authentix and SIPI’s expertise comes at a beneficial time for brand clients. The acquisition of SIPI by Authentix increases the scope of its offerings to brand protection clients by integrating digital security technologies and online anticounterfeiting and content rights services for an end-to-end, comprehensive brand protection solution.

SIPI provides clients with solutions to digitize their supply chains and uses investigation techniques to determine instances of counterfeiting and diversion while attempting to keep the internet free of fakes by building effective online enforcement programs.

For a limited time, SIPI is offering a free online brand risk analysis to qualified brands. More information can be found here.

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