What you need to know
- A security research group has found a major issue with counterfeit Apple products on Instagram.
- Over 163 counterfeiters were found in a month, with one earning over $140,00 in a day.
- Apple has a team that has taken down over a million listings last year alone.
Andrea Stroppa, a cybersecurity researcher, had an iPhone charger explode on her. As reported by Bloomberg, the investigation that she and her colleagues launched afterward revealed some shocking results.
Stroppa and his colleagues at Ghost Data Team, a cybersecurity, social-media research firm, looked into the incident and found he was far from alone. Chinese illicit factories and wholesale vendors are using the Facebook Inc. app to sell fake Apple accessories such as AirPods, lightning cables, iPhone batteries and USB power adapters. The knockoffs, identical except for their quality and security standards, are sold at discounted prices of as much as 10 times. The operation has become a multimillion-dollar global business with Europe and the U.S. as top customer destinations, according to a soon-to-be released report from Ghost Data Team reviewed by Bloomberg News.
The team says that the purpose of the investigation is to show how Instagram has failed to curb counterfeit products on its platform.
"Our study aims at exposing Instagram's difficulties, or unwillingness, to properly address its long-standing counterfeit market and also to highlight the many dangers of such illicit business for Apple and consumers alike," the researchers said. Facebook is "guilty of failing to adequately invest and protect American businesses and citizens around the world who use its platform."
A spokesperson for Facebook has pushed back, saying that they are responding to reports of counterfeit posts in as fast as a few hours.
"We have devoted more resources to our global notice-and-takedown program, which has made us quicker in taking action," the spokesperson said. "While there's always more work to do, we now regularly respond to reports of counterfeit content within one day, and often within a matter of hours."
However, responding to reports does not seem to be enough. The Ghost Data team monitored 163 counterfeiters for a month and found that their Instagram accounts uploaded over 50,000 posts promoting fake Apple products. One seller made over $140,000 in a single day. The most commonly faked products were AirPods Pro and the new MagSafe Charger.
Unlike the market for counterfeit luxury items, which is mostly based on WeChat Pay and PayPal transactions, the preferred payment systems for the fake Apple products were bank wire transfers and credit cards, the study found. The report includes bills posted by vendors of the counterfeit merchandise, including one seller who grossed $140,000 in a single day of online sales through his HSBC personal banking account, Ghost Data reports.
A spokesperson for Apple says that a team within the company has also been working on the issue and removed over a million listings for counterfeit products from online marketplaces.
"The safety of our customers is our first priority, and the risks associated with counterfeit products can be very serious ... We have a dedicated team of experts constantly working with law enforcement, merchants, social media companies and e-commerce sites around the world to remove counterfeit products from the market. In the last year we have sought the removal of over 1 million listings for counterfeit and fake Apple products from online marketplaces, including Facebook and Instagram."
Facebook is currently in a major dispute over privacy with Apple, claiming that the new privacy protections in iOS 14 would greatly hurt its advertising business. A new report from earlier today, however, has shown that Facebook and Instagram are among the most invasive apps on the App Store.