A prominent online influencer and reality TV star filed a lawsuit against TikTok on Thursday, claiming the platform failed to crack down on scam ads that use her videos to promote counterfeit products.
Bethenny Frankel, who has more than 990,000 followers on TikTok and starred in the Bravo TV series The Real Housewives of New York. says she was scrolling through TikTok on Sept. 16, when many of her followers began asking about an ad they’d seen promoting a cheap designer cardigan.
But Frankel, as she alleges in the lawsuit filed in U.S. District Court for the Southern District of New York, said she never consented to promoting the fake cardigan. Instead, she said, a scammer took an earlier video of her talking about a different cardigan and edited it to appear like she was supporting the fake. According to the lawsuit, a summary of which was made available to The Washington Post, Frankel immediately posted a TikTok video alerting her followers to the fake ad and reported the ad using TikTok’s content flagging system. Within minutes, her video of the incident was removed for bullying.
Frankel is now demanding compensation from TikTok for the damage the fake ad caused to her brand and wants the company to agree to introduce better protections for a creator’s likeness.
“First and foremost, I want there to be some tangible change, whether it’s a statute, a statute, a procedure, a move that protects content creators,” Frankel said in an interview. “TikTok must make efforts to protect creators and consumers. There are people who bought these products after seeing these ads with me in them.”
TikTok said it takes claims of copyright infringement and intellectual property infringement very seriously and offers several portals on its website for users to report content that violates the platform’s policies. “We have strict policies in place to protect people’s hard-earned intellectual property and keep misleading content off TikTok,” said Ashley Nash-Hahn, a spokeswoman for TikTok. “We regularly review and improve our policies and processes to combat increasingly sophisticated fraud attempts and continue to strengthen our systems.”
Using video creators like Frankel to market products online has become a major industry in recent years, and influencer marketing spend is expected to be around $16.4 billion by the end of this year, according to industry analysts Influencer Marketing Hub . According to Grand View Research, a management consulting firm, this market is expected to grow at more than 33 percent annually between 2022 and 2030.
But that growth hasn’t been accompanied by similar developments in guidelines and rules for how influencers’ images can be used, and abuse, creators say, is rampant.
Influencers’ reputations are built on maintaining trust with their followers. As more creators post content on TikTok, they say their videos are used for spam ads that sell subpar products. These ads aren’t just a nuisance, the 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 ran on TikTok. “People were like, ‘I thought you sold out. You peddle these bad products,” she said. “It’s such a violation of me as a brand, as a media figure. You can’t choose to just use me as an ad every day.”
Vanessa Flaherty, president of Digital Brand Architects, an influencer management company and marketing agency, said such abuse can hurt a creator’s business. “The value of a YouTuber is how they recommend products and what brands they stand behind,” she said. “If that’s taken out of context and applied to a brand that they don’t have and may never support or want to support, it threatens their credibility.”
The spam ads can also have legal ramifications for the creators. Content creators often sign exclusive deals with brands in certain categories. An ad promoting a competitor’s product, even if its likeness has been used unlawfully, could result in a breach of contract with a brand they’ve partnered with, Flaherty said.
Curbing these fake ads has been a struggle for influencers and brands alike. In her lawsuit, Frankel is asking TikTok to create a way for influencers to internally flag unauthorized ads so they can be quickly removed.
A representative for Jenni Kayne, a clothing brand, said the company contacted TikTok in mid-September to report ads for a counterfeit product featuring influencers like Frankel. Jenni Kayne representatives submitted a trademark certificate, links to the offending ads and screenshots on the third-party website, and a formal report to TikTok. Still, the ads weren’t removed for at least 10 days, the company said.
“It’s been over 20 emails from us begging her,” said Alexa Ritacco, Jenni Kayne’s chief marketing officer. “TikTok took so long to reply. It was so clear they had no record of this. We received hundreds of direct messages daily about the fake ads.”
“Users can report content in the app and escalate concerns related to copyright or trademark infringement through our website,” said Nash-Hahn, spokesman for TikTok. “Ad content goes through multiple layers of verification before it’s approved, and we’ve taken steps to identify and remove deceptive or infringing ads.”
Still, some ads are slipping through the cracks and the creators have taken to TikTok themselves to try and get the message across to followers.
“I can’t believe I have to say this,” Lindsay Albanese, a TikTok creator and founder of online marketplace TheFileist.com, told her 656,000 followers in a TikTok video in late September. “But if you see an ad out there where I’m trying to sell a bra, that’s a scam. They took my TikTok video… and edited it like I was talking about her bra.”
She said attempts to report the issue to TikTok were unsuccessful and that the fake ad hurt her brand. “It’s so annoying,” she said on TikTok. “I don’t know if these products were made ethically, if this company followed labor laws and fair wages.”
Frankel’s lawsuit alleges that TikTok hasn’t alleviated these problems because it profits from the sales that take place through the fake ads. The lawsuit alleges that TikTok generates revenue from advertising and that scammers pay the company to run ads for its fake goods by abusing influencers’ likenesses.
“Although the platform is not an e-commerce site, it facilitates and encourages the sale of products,” reads a summary of Frankel’s complaint. “The promotion of products, especially counterfeit products, generates millions of views and motivates TikTok to increase its revenue streams by allowing counterfeit products to be exposed to users.”
“They use us to sell products, these fake companies,” Albanese said. “It’s only going to get worse until the social media platforms take action quickly. I should be able to email TikTok to say it’s not me and have it removed immediately.”
Nash-Hahn said that from July 2021 to December 2021, TikTok received 49,821 copyright takedown notices globally and successfully addressed 40,469 or 81.2 percent of takedown requests by removing infringing content.
In 2017, the Federal Trade Commission required influencers to disclose partnerships, and platforms like Instagram and Twitter have since developed tools to make partnerships between brands and creators more obvious to viewers. However, since most influencer marketing deals are negotiated outside of the purview of technology platforms, apps like TikTok may not know which deals are fraudulent.
To make matters worse, some influencers are faking sponsored content and promoting brands as if they have partnerships to boost their image. Most brands are okay with free advertising, but many luxury brands are not.
Frankel said much of this could be resolved if platforms like TikTok had a clearer way to address issues between brands and developers. Influencers, she said, should be able to work with platforms to ensure they remain in control of 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 area,” she said. “I have a platform, I have influence and I want to make a difference on a larger scale.” She has set up an email address for creators who are similarly impacted to join her lawsuit.
There is bipartisan agreement in Congress that something should be done. On Wednesday, Rep. Jan Schakowsky (D-Ill.) and Gus M. Bilirakis (R-Fla.) introduced legislation to combat the online sale of counterfeit products. The Integrity, Notification, and Fairness in Online Retail Marketplaces for Consumers (INFORM Consumers) Act would require online platforms to collect, verify, and disclose certain third-party information.
Jessica Rich, the former director of the Bureau of Consumer Protection at the FTC, said lawmakers are increasingly interested in holding platforms accountable for the ads and content they host. She referred to the INFORM Act and the movement to revise Section 230, the legal provision that protects websites from liability for third-party posts. “The fact that you have so many proposals in Congress to hold platforms liable for content on their sites shows you that this issue is not adequately addressed under current law,” she said.