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Expert Insights

26 May 2021

Counterfeit goods – online platforms and luxury brands take a new collaborative approach

Online retail has been increasing for the best part of a decade due to a shift in consumer behaviour and even more so during the Covid-19 pandemic with high street and luxury brands forced to close their doors to comply with government restrictions.

Naturally with the increase in online retail comes the inevitable risk of potentially purchasing counterfeit goods. Infringers will attempt to sell their counterfeit goods through well-respected and extremely popular online platforms, such as Amazon, eBay and Facebook, as third party sellers.

Last month, it was reported that social media platform, Facebook, and luxury brand, Gucci, have filed a joint lawsuit in California against a counterfeiter who had allegedly been using Facebook and Instagram accounts to sell counterfeit Gucci products. This joint lawsuit follows numerous attempts by the platform to take down over 100 Facebook and Instagram accounts, which repeatedly kept reappearing.

The lawsuit is based on the unauthorised use of various trade mark registrations owned by Gucci. The famous trade marks were applied to inferior quality goods and made available for sale on the social media platform. Such activity is also in breach of Facebook’s terms of use. The acts of the counterfeiter ultimately resulted in misleading the public as to the origin, and quality, of the goods.

Commentary:

Due to the increase in online retail and the various different retail channels available to consumers, brands will want to protect and preserve their reputation as much as possible in the midst of this change in consumer behaviour. As such, it is so important (now more than ever) for brands to be vigilant and, where necessary, take action against counterfeiters to protect their reputation and value in their brand.

This joint action filed with Gucci is a first for Facebook, although Amazon has already taken such an approach with filing lawsuits along with luxury brands such as Valentino and Ferragamo. This strong, collaborative approach shows a shift in the attitude of dealing with online counterfeit goods.

It has not been uncommon to see luxury brands taking action against online platforms for not preventing the sale of counterfeit goods, but now efforts appear to be turning towards the counterfeiters themselves. Arguably, not a surprising shift in approach to counterfeit goods by brands themselves, but what is surprising is the shift in action of the online platforms. In the past, submitting takedown notices to the platforms would be the normal course of action, however, due to the now modernised, sophisticated counterfeiter, it looks like the mere use of takedowns is not enough.

Online platforms are now under more pressure to be more proactive in their approach to tackling the ever-escalating issue of counterfeit goods, particularly in the US, which this lawsuit demonstrates. There has been some increase in pressure over the last decade from the EU Commission, which adopted two reports concerning Memoranda of Understandings, which requested signatories (including online platforms and rights holders) to adopt certain measures and ‘enhanced co-operation’ with authorities, in order to tackle the issue of counterfeit goods online. However, it would certainly be interesting to see whether such pressures mount in the UK and EU following the outcome of this case in the US and whether such joint actions will become prevalent going forward.

Watch this space!

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