Counterfeiters increasingly sell via Instagram

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On the social media platform Instagram, the number of accounts advertising counterfeit goods has almost tripled in recent years. This is the result of a new study focusing on international manufacturers of fashion and luxury goods.

Instagram is becoming “the preferred choice for counterfeiters of any kind” – this is the alarming conclusion of a new study published by the analytics firm Ghost Data. According to the research, the number of suspected counterfeiting accounts advertising via the subsidiary of Facebook has risen by about 170 percent since 2016.

The users which Ghost Data identified as counterfeiters publish more than 64 million posts and around 1.6 million Instagram Stories per month – an increase of more than 300 percent compared to 2016, the analysis shows. Of the accounts examined, around 43 percent could be traced back to China, followed by Russia (30 percent), Indonesia (13 percent), the Ukraine (5 percent), and Turkey (4 percent).

The study focuses on international manufacturers of fashion and luxury items. To attract potential buyers, the counterfeiters apparently employ hashtags of well-known brands with large groups online followers – Gucci, Louis Vuitton, and Chanel top the list. In addition, specific hashtags such as #mirrorquality are sometimes used to covertly refer to fakes.

Instagram is currently primarily used as an advertising platform by counterfeiters – this is also due to the fact that users have so far not been able to pay through the app. To conduct their purchase, they are therefore often redirected to encrypted messenger and payment services, which largely offer extensive protection from enforcement. According to Ghost Data, the counterfeiters most frequently use WhatsApp, WeChat, and Line to communicate with potential buyers, while WeChat Pay, Paypal, and Venmo are particularly popular as payment methods.

However, this might change with a direct payment option that Instagram is currently introducing: For users in the US, the so-called checkout function is already available for certain brands. “We are dealing with a multi-billion dollar underground economy particularly active on major social media platforms and surely eager to somehow exploit this new Instagram feature,” Ghost Data comments.

It’s not the first time Instagram has been highlighted because of counterfeit trade on its platforms. Last year, for example, Adidas and Reebok pointed to the platform as a distribution channel for counterfeits in a lawsuit against IP infringement on social media. Instagram’s parent company Facebook and its subsidiary WhatsApp have also been criticized as popular marketplaces for fakes (we reported).

Instagram says it is now allocating more resources to help fight counterfeit trade, adding that the company now regularly responds to reports of IP infringement within one day. “We have a strong incentive to aggressively remove counterfeit content and block the individuals responsible from our platform,” a company spokesperson said.

Sources: Ghost Data, Instagram

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