Social media in focus in controversy over negative list

© Eugenio Marongui/stock.adobe.com
Next to e-commerce platforms, several social media services have been suggested for the US government’s upcoming Notorious Markets List. However, one popular social network does not consider itself responsible if illegal transactions are facilitated using its apps.

The submissions provided to the US officials for the upcoming Notorious Markets List highlight several well-known online platforms. This negative list, published annually, identifies online and offline markets that, according to the Office of the U.S. Trade Representative (USTR), inadequately protect intellectual property (IP) and trademarks.

Among others, the ensuing debate is currently focusing on operators of various social media platforms and chat services. These e.g. include the US industry giant Meta, with its social networks Facebook, Instagram, and WhatsApp. For example, the association Transnational Alliance to Combat Illicit Trade (TRACIT) argues that fraudulent advertising on social media platforms “is a devious form of online fraud intended to route social media users to rogue websites set up to sell counterfeits.” TRACIT sees a huge potential market internationally, with Facebook and Instagram alone having ca. 1.4 billion users worldwide.

This view is supported by the trade association American Apparel & Footwear Association (AAFA). The organization, which submitted Meta for inclusion on the USTR list, criticizes, among other things, a lack of transparency on the group’s social media platforms. Last year, a study by the analytics company Ghost Data had already argued that counterfeiters were using Facebook, Instagram, and WhatsApp to generate billions of dollars in annual sales.

In its submission, Chinese company Tencent, whose social networks Weixin and WeChat were included on last year’s Notorious Markets List, argues against the listing of the two chat services. A key argument here is that the services were not marketplaces, but communication platforms: “In fact, the apps are social communication tools and information publishing platforms, and are built around people, not products.”

The Intellectual Property Owners Association (IPO) disagrees in its submission – for them, WeChat is correctly blacklisted. The service “claims it is merely a social media app, but has become one of the largest online black markets in China for the sale of counterfeit products”, according to the association.

Already last year, there had been calls for social media sites to be included in the negative list. When the previous Notorious Markets List was published in February 2022, the USTR rejected this generally; back then, the removal of Amazon’s European sites from the blacklist also caused a stir.

For the upcoming Notorious Markets List, a total of 28 submissions were now received. The online platforms suggested for inclusion in the list also include well-known e‑commerce marketplaces such as the Chinese providers AliExpress and Pinduoduo or the Indonesian Tokopedia. Companies and associations now had until 21 October to submit rebuttals.

Source: WTR Magazin

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