Trading Standards and Facebook

1st February 2018 Business Crime

If you are the subject of a Trading Standards investigation concerning counterfeit goods, whether arising from sales through Facebook or otherwise, JMW's Trading Standards defence team can provide the expert advice and guidance you or your business needs. Find out more about our expert team and the services and advice we provide here - or by calling 0345 872 6666.

Facebook users are accustomed to scrolling through an array of advertisements for goods varying from clothing, leather goods, cosmetics, sportswear, films and DVDs, electronics, often tailored to the individual Facebook user. For individuals or businesses who sell goods on Facebook, whether that be through paid advertising, 'Marketplace' or an individual simply advertising to friends and family, have the implications and severe consequences of miss-selling, product descriptions and the quality or authenticity of the goods been sufficiently considered?

In December 2017 the BBC reported that fake goods were 'flooding social networks.' Reports that Facbeook has been criticised by Trading Standards over its failures to prevent its users from selling counterfeit designer and luxury goods online indicates that online sales on the social media platform will be under increased scrutiny. Whilst Trading Standards' investigations into online sales have typically centred around sales though Amazon and EBay, the past year has seen greater prevalence of sales of goods through Facebook's 'Marketplace' since its re-launch in October 2016. Facebook has now been branded as 'a favourite for counterfeit sellers', overtaking both Amazon and EBay.

In a landscape of increased social media sales, 2016 saw the instigation of a large Trading Standards operation, to target those offering goods for sale on Facebook and Instagram. It has become increasingly common for Trading Standards officers to purchase goods directly from Facebook advertisements and upon receipt of goods that are subsequently found to be counterfeit, report the trader to Facebook to remove advertisements. However, if Facebook are failing to take the necessary action and not preventing the sale of counterfeit goods, is a change in tack and a more proactive approach from Trading Standards' specialist 'E-crime team' on the horizon?

Trading Standards investigators have warned that they are 'actively monitoring' Facebook and other social media sites for counterfeit goods. January 2018 sees the launch of 'Friends Against Scams' in which individuals, communities, businesses, neighbours and work colleagues are encouraged to help 'take a stand against scams' by identifying and reporting alleged online scams; Facebook being the obvious starting point as it continues to be the most popular social media site in the UK, with its approximate 32 million users across the UK. The Trading Standards initiative to provide training and awareness to up to a million members of the public by 2020 will undoubtedly lead to a rise in Trading Standards investigations and potential prosecutions arising out of those who identify apparent scams through their Facebook account.

Sellers who advertise and sell goods online face the possibility, arguably increasingly so, of investigation and criminal prosecution by Trading Standards for offences that may have been committed under the Consumer Protection from Unfair Trading Regulations 2008, Trade Marks Act 1994, Copyright, Design and Patents Act 1988 and Fraud Act 2006.

Individuals selling through Facebook, can unwittingly become involved and fail to consider the necessary control measures, policies and due diligence that should be in place before becoming embroiled in the online sales arena. Selling items for free on Facebook's 'Marketplace' in which the requirement to simply click the 'Marketplace' icon, followed by the 'Sell Something' button, provide a photograph, title and description of the item may appeal to sellers for its ease and simplicity. However, there is increasing possibility for sellers to be caught out for a host of reasons. Although selling through Facebook may appear straightforward, individuals may find that they face investigation if they are considered to be selling inferior products, implying authenticity of goods, using a company's name or trademark by the wording, signature or logo on goods, packing or labelling or if the description of goods is inaccurate.

Retailers, whether selling through Facebook or other online platforms, even if they simply acquired the goods and had no involvement in manufacturing the products, may still be prosecuted for their involvement in the sales if they cannot show that they behaved responsibly or diligently in the marketing of the goods. Following the Supreme Court's ruling in R v M C T 2017, prosecutions may also arise in cases of 'grey goods'; whereby businesses or individuals have produced or manufactured products with the brand owner's consent, but later sold without consent. In summary, it is the responsibility of the trader to take reasonable precautions when selling goods online, or risk facing an investigation and potential prosecution.

A Trading Standards investigation and prosecution arising out of Facebook sales or otherwise can be very serious with significant consequences. Mike Rainford, who heads up the dedicated Trading Standards defence team and represented Vance Miller who was subject to the largest ever Trading Standards investigation in UK Legal history says, 'I have witnessed a much more aggressive and determined effort from Trading Standards when pursuing both individuals and businesses alike.' Individuals and companies can face unlimited fines and terms of imprisonment for offences. The courts are also empowered, when faced with cases involving counterfeit goods to order the destruction of all goods and instigate confiscation proceedings, whereby assets acquired from criminal activity, in other words the money made from online sales, will be ordered to be paid back.

Sam Healey, Senior Associate and part of the Trading Standards defence team shares his view that 'the use of the internet and social media as a trading platform is expanding rapidly. To tackle the issue of 'cyber-crime', additional resources are being deployed and partnerships forged between National Trading Standards, Police and the Finance Industry. It is imperative that anyone who faces an investigation has advice and assistance from the outset and experienced lawyers to protect their position'. JMW can provide the expert advice and guidance you or your business needs. Our team is highly qualified and experienced in cases of this type and can help you robustly defend against any allegations.

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Catherine O'Rourke is a Solicitor located in Manchester in our Business Crime & Regulation department

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