close
close

“Live” shopping thwarts some high-tech tools to stop fake products

“Live” shopping thwarts some high-tech tools to stop fake products

By

Reuters API

Published


May 7, 2024

Livestream shopping, where buyers and sellers transact via video in real time, is growing in the United States, while technology to control counterfeit products has not kept pace until now, a situation that makes it easier for counterfeit products to flood the market, patent attorneys said.

Reuters

Livestream shopping was popularized by e-commerce sites like Alibaba.com and TikTok’s sister company Douyin after dominating China’s retail scene.

In the United States, TikTok merchants sell jewelry, second-hand Louis Vuitton handbags and $2 lip glosses in multi-hour video sessions. Seller feeds can attract dozens or even thousands of viewers asking questions about product materials, pricing, and availability.

Copyright violations in live videos are difficult to track. In general, combating violations in e-commerce can often seem like a game of whack-a-mole to lawyers and software companies that monitor the Internet due to the increasing volume of violations. For example, software company Red Points has spotted at least 4.6 million cases of copyright violations worldwide in 2023, up from 4 million a year earlier.

Amazon, the largest online marketplace in the United States, identified and seized 7 million counterfeit products worldwide in 2023, up from 6 million in 2022, according to the company’s brand protection reports.

Live streaming is “a safe haven for counterfeits until detection and enforcement catches up with this mode of sale,” said Luke DeMarte, an intellectual property attorney at Michael Best & Friedrich, referring to shopping live.

Both TikTok and Amazon said they have advanced technology in place to prevent merchants from selling counterfeits. TikTok said it monitors live videos with a mix of algorithms and humans and Amazon said it uses humans to monitor live purchases.

Direct sales on the Web are promising. Americans will spend $1.32 trillion on e-commerce in the United States this year, according to eMarketer, a research firm. Direct commerce could reach 5% of this spending by 2026, as more traditional retailers, including Macy’s, Inditex’s Zara, Nordstrom and Kohl’s,open a new tab adopt marketing technique, according to Coresight Research.

Some lawyers and the brands they represent use machine learning software to scan e-commerce platforms for possible violations of images, product descriptions and advertisements, but live videos pose additional challenges.

“By the time you see counterfeit products being sold on a TikTok live stream and they are removed, you should expect that at least some sales have occurred in the meantime,” DeMarte said.

DeMarte and other U.S. trademark attorneys have said the real-world nature of live transactions makes it difficult to identify and eliminate fakes and counterfeits, despite the development of new technologies aimed at detecting counterfeits.

Retailers launching shoppable videos must “ensure they have the necessary mechanisms in place to prevent criminal activity or monitor it in real time,” Kari Kammel, director of the Center for Anti-Counterfeiting and Product Protection at the Michigan State University.

Artificial intelligence and algorithms can currently detect still images and text that infringe on brands’ copyrights and trademarks, lawyers and software companies say. Similarly, e-commerce platforms often use AI and algorithms to prevent third-party vendors from posting counterfeit goods.

But the technology to analyze violations in video is rare.

Small business attorney Michelle Murphy said she receives five to 10 notifications each day from an AI vendor that tracks intellectual property violations in still images listed on Etsy, eBay, Amazon and TikTok. Of the hundreds of alerts it received, not one reported a violation regarding shoppable videos.

Keeping counterfeits off their e-commerce sites is critical to the future of major U.S. retailers. According to a TikTok Shop spokesperson, TikTok has technology that it says can detect potential infringement in live video streams. When content is flagged as infringing, it is removed and sent to a human moderator for review, the spokesperson said.

Some third-party software providers said they are currently partnering with TikTok Shop, typically by sharing information about suspected infringers, to spot and monitor instances of infringement on the platform’s live shopping videos.

Amazon expanded shoppable video to its Prime Video and Freevee streaming platforms in April. Its live streams cover various product categories, including electronic accessories, clothing and home goods, advertised by influencers and reality TV stars.

Amazon uses machine learning to scan its website for counterfeits; however, its live streaming functionality is manually moderated, the company said. The e-commerce giant requires live streamers to only show products available on Amazon.com, which are subject to its machine learning analytics.

Other retailers hosting live shopping, including Dyson, only sell their brands’ products or those for which they have a sales license.

© Thomson Reuters 2024 All rights reserved.