Facebook's lucrative ability to target ads based on what users post on their pages is fueling big sales for Chinese companies that peddle knockoff jerseys and other counterfeit merchandise, one watchdog group alleges.
Collecting users' personal data for marketing and advertising purposes gives web-based companies such as Google, Facebook and Twitter a powerful advertising pitch: Companies can surgically target consumers who have already expressed an interest in their products. But turning that technology over to foreign companies who profit from counterfeit gear is tantamount to helping them steal, say critics.
“They’re following our keywords and conversations," Eric Feinberg, founder of advocacy group Fans Against Kounterfeit Enterprise [FAKE], told FoxNews.com. "My public data is being shared with illegal enterprises -- and that bothers me.”
Feinberg's group has tracked how ads promoting knockoff sports gear such as Peyton Manning jerseys and fake handbags have popped up on members' Facebook pages within minutes of relevant posts. The company's targeted software allows clients to create advertisements for a hyperfocused audience by sifting through user’s interests and even comments posted on a timeline. A hashtag can also be added to search criteria to target users with similar interests.
“I started noticing specific ads back in February," Kay’Lee Wells, also with Fans Against Kounterfeit Enterprise, told FoxNews.com. She noticed knockoff Louis Vuitton handbag ads on her newsfeed page a day after changing her timeline cover to an image of a retail location of the designer brand. "Whenever I changed my cover photo or made comments about certain things they would pop up.”
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Officials at the social networking site maintain that they do not sell user information to any advertisers, who are allowed only to choose demographic targets when posting an ad.
'Imagine the absurdity of a magazine or website that allowed anyone to create any ad and instantly run it.'
- Jason Stern, internet and consumer rights lawyer
“At Facebook, we strive to create a trusted environment for our users and advertisers," a spokeswoman for Facebook said in a statement to FoxNews.com. "We offer the ability for users to provide immediate feedback on our ads and encourage them to report anything they find offensive or misleading.”
While Facebook's policy states that no counterfeit goods are allowed to be advertised or sold, experts say the company is not doing enough to uphold its own rules and guidelines. But the spokeswoman could not explain how Facebook ad space has gotten into the hands of known foreign sellers of counterfeit goods, such as Warmcounter.co.in, jerseyseeker.com and zerojersey.com.
“We have a team dedicated to investigating ads and user complaints, and we will remove ads that users bring to our attention if they violate our ad guidelines," she said.
Professional sports leagues, which control licensing of their official paraphernalia, and designers of high-end handbags have long battled the bootleg manufacturers, which sell their wares at a fraction of the cost of officially sanctioned gear.
“We are very aggressive in protecting our fans from being duped into buying inferior merchandise. These sites offer too-good-to-be-true items, only to provide fans with inferior and laughable merchandise,” said Brian McCarthy, a spokesman for the National Football League.
The Justice Department is taking notice too, seizing $1.5 million from banks made off the sale of counterfeit goods May 11, following a U.S. Immigration and Customs Enforcement (ICE) investigation of several Chinese websites selling counterfeits handbags, athletic apparel, sunglasses and more.
Mining web users' data to market directly is, in most cases, perfectly legal. But allowing companies that profit by breaking the law to buy this marketing muscle is something for which Facebook should be held accountable, said Jason Stern, a New York-based Internet and consumer rights lawyer.
“The problem isn't the targeted ads," Stern told FoxNews.com. "It's the lack of oversight on the part of Facebook to review the ads before they begin to run. Imagine the absurdity of a magazine or website that allowed anyone to create any ad and instantly run it?
“At best Facebook is complicit with the advertisers of counterfeit goods and, at worst, they are criminally negligent in allowing their users to be taken advantage of,” he added.
Perry Chiaramonte is a reporter for FoxNews.com. Follow him on Twitter at @perrych