The rise of dupes and counterfeits in influencer marketing highlights the need for transparency and vigilance. As companies like Amazon and Nike aggressively pursue legal action, influencers and brands must prioritize ethical practices to protect their reputations and avoid legal pitfalls. This ongoing issue underscores the importance of education, regulation, and due diligence in navigating the complex landscape of modern marketing.
The Darnell sisters’ recent Christmas hauls, detailed in their viral posts, have sparked a heated online discourse about counterfeit luxury goods. Kylan and Izzy Darnell showcased a range of high-end items, with some observers alleging that certain products were counterfeit. In a now-deleted response, Kylan Darnell admitting to mixing counterfeit items in with original branded luxury goods. Kylan and her sister Izzy have collectively amassed almost 2 million followers by creating lifestyle videos featuring designer goods. The recent controversy has shed light on the growing issue of influencers attempting to pass off fake luxury items as genuine, raising ethical and legal concerns while underscoring the role of social media in promoting dupes and counterfeits.
Influencers and the Rise of Dupes
While influencers often share “dupes”—affordable alternatives to designer products—a report by the American Apparel & Footwear Association (AAFA) highlights the fine line between dupes and counterfeits. Unlike dupes, which are inspired by but do not copy a product outright, counterfeits are illegal replicas intended to deceive consumers. This distinction has serious legal and ethical implications for influencers who fail to disclose whether an item is a dupe, counterfeit, or authentic.
The FTC and Disclosure Requirements
The Federal Trade Commission (FTC) has issued guidance to ensure transparency in influencer marketing. Under Section 5(a) of the FTC Act, “unfair or deceptive acts or practices” are unlawful. This includes failing to disclose brand relationships, discounts, or affiliate links. Influencers promoting goods—whether authentic, dupes, or counterfeit—must make these relationships clear to avoid misleading their audiences. The FTC defines deceptive practices as those involving material omissions or misrepresentations that mislead consumers acting reasonably.
Legal Implications of Selling or Promoting Counterfeit Items
Promoting or purchasing counterfeit items can have serious legal, financial, and reputational consequences as follows:
- Trademark Infringement: Selling counterfeit goods violates intellectual property rights, specifically trademark laws. Trademark owners can seek monetary damages, injunctive relief, seizure of counterfeit goods and profits earned from sales.
- Unfair Competition: Promoting counterfeit items may be considered deceptive or unfair trade practices, subject to additional penalties under federal or state consumer protection laws.
- Consumer Fraud Liability: If counterfeit goods are marketed as authentic, sellers can face lawsuits for fraud or misrepresentation.
The majority of all counterfeit products seized each year are apparel and accessories, most coming into the United States from China. Engaging in the sale or promotion of counterfeit goods may classify an individual as intentionally trafficking counterfeit goods under U.S. law.
Importers of counterfeit goods may face civil penalties if their counterfeit goods are seized by the CBP. Under 19 C.F.R. §133.27 outlines civil penalties no greater than the value of the authentic merchandise for a first offense and twice the value for subsequent offences.
The Trademark Counterfeiting Act also prohibits the sale of counterfeit goods. Under this Act, individuals or companies who intentionally traffic in counterfeit goods could face fines and imprisonment. The legal and financial risks associated with the sale of counterfeit goods underscore the importance of compliance with federal laws and vigilance in preventing involvement in the counterfeit goods market.
High-Profile Legal Cases
Recent lawsuits underscore the risks influencers face when promoting counterfeit goods:
1. Nike vs. Eben Fox: Nike accused Fox of working with retailer Pandabuy to market counterfeit shoes, alleging trademark infringement. The case, filed in Florida, highlights the dangers of affiliate marketing programs promoting counterfeit goods.
2. Amazon’s Aggressive Litigation: In a 2020 lawsuit, Amazon sued influencers and sellers promoting counterfeit luxury goods. These cases, some of which settled in 2021, involved tactics like “hidden links” directing followers to counterfeit listings disguised as generic products. Additional lawsuits filed in 2023 emphasized Amazon’s commitment to curbing counterfeits on its platform.
These cases serve as cautionary tales for influencers and brands, showcasing the potential consequences of affiliating with counterfeit sellers.
How Brands, Influencers, and Consumers Can Protect Themselves
For Brands:
- Monitor social media: Regularly search for posts featuring counterfeit versions of your products.
- Conduct due diligence: Vet influencers and third-party vendors before partnering with them.
- Enforce intellectual property rights: Collaborate with IP lawyers on an enforcement plan that includes monitoring services to safeguard your brand and take action against counterfeiters.
For Influencers:
- Avoid dubious partnerships: Steer clear of affiliate programs linked to counterfeit goods.
- Follow FTC guidelines: Clearly disclose brand relationships, discounts, and affiliate links.
- Consult legal experts: Have contracts and partnerships reviewed by an attorney to ensure compliance with laws and regulations.
For Consumers:
- Exercise discretion when purchasing goods through affiliate links or from vendors on e-commerce platforms.
