A lawsuit filed Thursday in New York by a prominent online influencer and former reality TV star highlights what creators and their managers say is another gap in the way the internet is regulated and managed.
In her claim against TikTok, Bethenny Frankel, who was featured in the Bravo television series “The Real Housewives of New York” and who now has more than 990,000 followers on TikTok, says the platform failed to crack down on scam ads that used her videos to promote counterfeit products.
It comes at a time of bipartisan interest in Washington in doing more to regulate the burgeoning online merchandise market. On Wednesday, Reps. Jan Schakowsky (D-Ill.) and Gus M. Bilirakis (R-Fla.) introduced legislation to combat the sale of counterfeit products online. The Integrity, Notification, and Fairness in Online Retail Marketplaces for Consumers (INFORM Consumers) Act would require online platforms to collect, verify and disclose certain information from third-party sellers.
Jessica Rich, the former director of the Bureau of Consumer Protection at the Federal Trade Commission, drew a connection between holding platforms accountable for the ads they host and the ongoing interest in revamping Section 230, the legal provision that protects websites from liability for what a third party posts. “The fact that you’ve got so many proposals in Congress to hold platforms liable for content on their sites does tell you that this issue is not adequately addressed under current law,” she said.
Read Bethenny Frankel’s lawsuit against TikTok
TikTok said it takes claims of copyright and intellectual property infringement very seriously and offers several portals on its website where users can flag content that violates the platform’s guidelines. “We have strict policies to both protect people’s hard earned intellectual property and keep misleading content off of TikTok,” said Ashley Nash-Hahn, a TikTok spokesperson. “We regularly review and improve our policies and processes in order to combat increasingly sophisticated fraud attempts and further strengthen our systems.”
But Nash-Hahn also acknowledged that nearly a fifth of videos that draw complaints don’t get removed. She said that from July 2021 through December 2021, TikTok received 49,821 global copyright takedown notices and successfully addressed 40,469, or 81.2 percent, by removing violative content.
“Users can report content in the app, and they may escalate concerns related to copyright or trademark infringement via our website,” she said. “Advertising content passes through multiple levels of verification before receiving approval, and we have measures in place to detect and remove fraudulent or violative ads.”
Frankel says she was scrolling through TikTok on Sept. 16 when many of her followers began asking about an ad they’d seen featuring her promoting a cheap knockoff designer cardigan.
Frankel said she’d never agreed to promote the knockoff cardigan. Instead, she said, a scammer had taken a previous video in which she talked about a different cardigan and edited it to make it look like she was endorsing the knockoff. According to the lawsuit, which was filed in U.S. District Court for the Southern District of New York, Frankel immediately posted a TikTok video alerting her followers to the fake ad and reported the ad through TikTok’s content-flagging system. Within minutes, she said, her video about the incident was removed for bullying.
Frankel is now seeking damages from TikTok for the harm that the fake ad has caused to her brand and wants the company to agree to institute better protections surrounding a creator’s likeness.
“First and foremost, I want there to be a tangible change, whether it’s an act, a law, a process, a step, that protects content creators,” Frankel said in an interview. “An effort needs to be made by TikTok to protect creators and consumers. There are people who purchased these products after they saw these ads with me in them.”
The use of video creators like Frankel to market products on the internet has become a major industry in recent years, and the amount spent on influencer marketing is expected to total approximately $16.4 billion by the end of this year, according to industry analysts Influencer Marketing Hub. That market is likely to grow at an annual rate of more than 33 percent between the years 2022 to 2030, according to Grand View Research, a business consulting firm.
But that growth has not been accompanied by similar developments of guidelines and rules about how influencers’ images can be used, and abuse, creators say, is common.
Influencers’ reputations are built on maintaining trust with their followers. As more creators post content on TikTok, they say their videos are being used for spammy advertisements hawking subpar products. These ads aren’t simply a nuisance, creators said — they can have major consequences for a creator’s business.
Frankel said she was flooded with messages for days when the fake ad was running on TikTok. “People were saying, ‘I thought you sold out. You’re hawking these bad products,’ ” she said. “It’s such a violation of me as a brand, a media figure. You can’t decide to just use me as an advertisement day in and day out.”
Vanessa Flaherty, president of Digital Brand Architects, an influencer management company, said such abuse can damage a creator’s business. “The value of a creator is in how they recommend products and what brands they stand behind,” she said. “If that’s being taken out of context and being applied to a brand they have not and may never want to endorse or support, that puts their credibility at risk.”
The spam ads can also have legal consequences for creators. Often, content creators sign exclusive deals with brands in specific categories. An ad promoting a competitor’s product, even if their likeness was used unlawfully, could put them in breach of contract with a brand they’ve signed a partnership deal with, Flaherty said.
Tamping down on these fake ads has been a struggle for influencers and brands alike. In her suit, Frankel asks that TikTok create a way for influencers to flag unauthorized ads internally so that they can be swiftly removed.
A representative from Jenni Kayne, a clothing brand, said the company contacted TikTok in mid-September to report ads for a counterfeit product, featuring influencers including Frankel. Representatives from Jenni Kayne submitted a trademark certificate, links to the offending ads and screenshots of the third-party site, along with a formal report to TikTok. Still, the ads weren’t removed for at least 10 days, the company said.
“It was over 20 emails of us begging them,” said Alexa Ritacco, Jenni Kayne’s chief marketing officer. “It took TikTok so long to respond. It was so clear they did not have a protocol for this. We were getting hundreds of direct messages per day about the counterfeit ads.”
Some creators have taken to TikTok themselves to try to get the message out to followers.
“I can’t believe I have to say this,” Lindsay Albanese, a TikTok creator and founder of online marketplace TheFileist.com, said in a TikTok video to her 656,00 followers in late September. “But if you see an ad out there of me trying to sell a bra, it is a scam. They took my TikTok video … and edited it like I was talking about their bra.”
She said that attempts to flag the issue to TikTok were fruitless and that the fake ad was harming her brand. “It is so infuriating,” she said on TikTok. “I don’t know if these products were ethically made, if this company was following labor laws and fair wages.”
Frankel’s suit alleges that TikTok has not mitigated these problems because it profits from the sales taking place through the phony ads. The suit claims that TikTok generates revenue through advertisements and that scammers are paying the company to run ads for their counterfeit goods, misusing influencers’ likenesses.
“Although the platform is not an e-commerce site, it facilitates and promotes the sale of products,” a summary of Frankel’s complaint reads. “The promotion of products, particularly counterfeit products, garner millions of views and incentivize TikTok to increase their revenue streams by allowing the counterfeit products to be presented to users.”
“They’re using us to sell products, these counterfeit companies,” Albanese said. “It’s just going to get worse until the social media platforms start cracking down quickly. I should be able to email TikTok, say this isn’t me, and have it taken down immediately.”
In 2017, the Federal Trade Commission urged influencers to disclose partnerships, and platforms such as Instagram and Twitter have since built tools to make partnerships between brands and creators more obvious to viewers. However, because most influencer marketing deals are negotiated outside of tech platforms’ purview, apps like TikTok may be unaware of what deals are fraudulent.
To make matters worse, some influencers fake sponsored content, promoting brands as if they have partnerships, to boost their image. Most brands are okay with the free advertising, but many luxury brands are not.
Frankel said much of this could be solved if platforms such as TikTok had a clearer way to address issues between brands and creators. Influencers, she said, should be able to work with the platforms to ensure they retain control over their image on the app, and brands should be able to flag fraudulent ads or counterfeit products. “I want to be a voice for change in this space,” she said. “I have a platform, I have influence, and I want to make a difference on a greater scale.” She said she has set up an email address for creators who have been similarly affected to join her suit.