Bethenny Frankel, a former real New York housewife, sues TikTok

A lawsuit filed Thursday in New York by a prominent online influencer and former reality TV star highlights what the creators and their managers say is another loophole in how the internet is regulated and managed.

In her complaint against TikTok, Bethenny Frankel, who appeared on the Bravo television series “The Real Housewives of New York” and now has more than 990,000 followers on TikTok, says the platform has failed to crack down on scam ads that used the his videos to promote counterfeit products.

It comes at a time of bipartisan interest in Washington to do more to regulate the burgeoning online merchandise market. Rep. Jan Schakowsky (D-Ill.) And Gus M. Bilirakis (R-Fla.) Introduced legislation on Wednesday to combat the sale of counterfeit products online. The Integrity, Notification and Fairness Act in Online Retail Markets for Consumers (INFORM Consumers) 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, has established a link between holding platforms accountable for the ads they host and an ongoing interest in renewing Section 230, the legal provision that protects websites from liability for what a third party post. “The fact that you have so many proposals in Congress to hold platforms accountable for the content on their sites tells you that this issue is not adequately addressed by current law,” she said.

Read Bethenny Frankel’s lawsuit against TikTok

TikTok said it takes copyright and intellectual property infringement complaints very seriously and offers several portals on its website where users can report content that violates the platform’s guidelines. “We have strict policies both to protect people’s hard earned intellectual property and to keep misleading content out of TikTok,” said Ashley Nash-Hahn, a spokesperson for TikTok. “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 attract complaints are not removed. He said that from July 2021 to December 2021, TikTok received 49,821 copyright takedown notices globally and successfully tackled 40,469, or 81.2 percent, by removing infringing content.

“Users can report content in the app and can escalate concerns about copyright or trademark infringement via our website,” he said. “Advertising content goes through multiple levels of verification before receiving approval, and we have taken steps to detect and remove fraudulent or infringing ads.”

Frankel says he was browsing TikTok on September 16 when several of his followers started asking about an ad they had seen promoting a cheap imitation brand cardigan.

Frankel said he had never agreed to promote the imitated cardigan. Instead, he said, a scammer had shot a previous video of him talking about a different cardigan and tweaked it to make it look like he was approving of the knockoff. According to the lawsuit, which was filed with the United States District Court for the Southern District of New York, Frankel immediately posted a video on TikTok alerting his followers to the fake ad and reported the ad via the reporting system. of TikTok content. Within minutes, he said, his video of him about the incident was removed for bullying.

Frankel is now seeking compensation from TikTok for the damage the fake ad did to his brand, and he wants the company to agree to institute better protections surrounding the likeness of a creator.

“First and foremost, I want there to be a tangible change, be it an act, a law, a process, a step, that protects content creators,” Frankel said in an interview. “TikTok must make an effort to protect creators and consumers. There are people who bought these products after seeing 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 amount to around $ 16.4 billion by the end of this year, according to Influencer Marketing Hub industry analysts. That market is likely to grow at an annual rate of more than 33% between 2022 and 2030, according to Grand View Research, a business consulting firm.

But that growth hasn’t been accompanied by similar developments of guidelines and rules on how influencer images can be used, and abuse, creators say, is common.

Influencers’ reputation is built on maintaining trust with their followers. As more and more creators post content on TikTok, they claim their videos are being used for spam advertisements that sell shoddy products. These ads aren’t simply a nuisance, creators said – they can have serious consequences for a creator’s business.

Frankel said she was inundated with messages for days when the fake ad was running on TikTok. “People said, ‘I thought you were exhausted. You’re selling these bad products, ‘”she said.” It’s such a violation of me as a brand, 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, at an influencer management firm, said such abuse can harm a creator’s business. “The value of a creator is in how he recommends products and which brands he supports,” she said. “If this is taken out of context and applied to a brand that they don’t have and may never want to endorse or support, it jeopardizes their credibility.”

Spam ads can also have legal consequences for creators. Content creators often sign exclusive deals with brands in specific categories. An ad promoting a competitor’s product, even if their likeness has been used illegally, could put them in breach of contract with a brand they have signed a partnership agreement with, Flaherty said.

Suppressing these fake ads has been a struggle for influencers and brands alike. In his lawsuit, Frankel asks TikTok to create a way for influencers to flag unauthorized ads internally so they can be removed quickly.

A rep for Jenni Kayne, a clothing brand, said the company contacted TikTok in mid-September to report ads for a counterfeit product, with influencers including Frankel. Representatives of Jenni Kayne presented a trademark certificate, links to offensive ads, and screenshots of the third-party site, along with a formal report to TikTok. However, the ads weren’t removed for at least 10 days, the company said.

“There were over 20 emails we begged for,” said Alexa Ritacco, Jenni Kayne’s chief marketing officer. “TikTok took so long to respond. It was so clear that they didn’t have a protocol for this. We were getting hundreds of direct messages a day about the fake ads. “

Some creators have turned to TikTok to try to get the message across to followers.

“I can’t believe I have to say this,” said Lindsay Albanese, creator of TikTok and founder of the online marketplace, in a TikTok video to her 656,000 followers in late September. “But if you see an ad out there about me trying to sell a bra, it’s a scam. They took my video on TikTok … and edited it as if I was talking about their bra. “

He said attempts to report the problem to TikTok were unsuccessful and that the fake ad was hurting his brand. “It’s so irritating,” she said on TikTok. “I don’t know if these products were ethically made, if this company was following fair wage and labor laws.”

Frankel’s lawsuit claims that TikTok hasn’t mitigated these problems because it profits from sales that happen through fake ads. The lawsuit claims that TikTok generates revenue through advertising and that scammers are paying the company to run ads for their counterfeit products, abusing the guise of influencers.

“Although the platform is not an e-commerce site, it facilitates and promotes the sale of products,” reads a summary of Frankel’s complaint. “Promoting products, especially counterfeit products, garners millions of views and incentivizes TikTok to increase its revenue streams by allowing counterfeit products to be presented to users.”

“They are using us to sell products, these counterfeit companies,” Albanese said. “It will only get worse until social media platforms start to collapse rapidly. I should be able to email TikTok, say it’s not me, and have it disassembled immediately “.

In 2017, the Federal Trade Commission urged influencers to reveal partnerships, and since then platforms like Instagram and Twitter have created tools to make partnerships between brands and creators more obvious to viewers. However, as most influencer marketing deals are negotiated outside the scope of tech platforms, apps like TikTok may not be aware of which deals are fraudulent.

To make matters worse, some influencers fake sponsored content, promoting brands as if they have partnerships, to strengthen their image. Most brands agree with free advertising, but many luxury brands don’t.

Frankel said much of this could be solved if platforms like TikTok had a clearer way to address the issues between brands and creators. Influencers, she said, should be able to work with platforms to ensure they retain control over their image on the app, and brands should be able to report 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 larger scale.” She said she set up an email address for creators who were similarly affected to join him because of him.