Online Retail Copyright Infringement: E-Commerce Scams featured image

Online Retail Copyright Infringement: E-Commerce Scams

by John DiGiacomo

Partner

Chances are pretty high that if you have a Facebook account you’ve seen the ads for online clothing companies such as RoseGal, RoseWe, DressLily, SammyDress, and Choies. They have pictures of stunning dresses, swimsuits, sweaters, and other clothes, and their prices are incredibly low – often less than $20 for most items. Some people have had great success ordering from these and similar companies, but that doesn’t seem to be the norm. Unfortunately, many women are left incredibly disappointed upon receipt of their orders, if they receive them at all!

The Better Business Bureau has reported hundreds of complaints against SammyDress and DressLily. They are suggesting consumers complete a more in depth look at the reviews of these companies before purchasing from them. Upon completion of added research, it’s discovered that other websites such as PissedConsumer.com and SiteJabber have lists of complaints by people that have ordered items from one of these companies and received something completely different in the mail.

Facebook has been catching a fair bit of flak because their policies don’t catch that the ads being posted on their website are for disreputable companies. However, Facebook has explained that their policies focus on language and other elements of the ad itself. Their policies aren’t designed to target quality of goods or reputability of the company. In a statement issued on April 8, Facebook said that they would be working to factor in these issues moving forward so that consumers can have more faith in the advertisements showing up in their newsfeeds.

Misleading consumers by showing pictures of one product and delivering another are only one of the many accusations against these clothing companies. They’re also facing huge allegations of copyright infringement. All appearing to be based overseas in China, these companies have been taking photos of celebrities, fashion gurus, and others across the Internet in stunning clothes, cropping and editing the pictures, and then using them on their own websites to advertise “their” clothing line. The people and websites these pictures are stolen from receive no credit for use of the photo and when consumers are unhappy with their purchase they sometimes end up complaining to the celebrity, because the company doesn’t answer their complaints.

In an attempt to raise awareness, Facebook groups are popping up everywhere warning consumers against purchasing from these and similar companies. Facebook itself is now working towards having a more reliable system for advertising. Websites such as the Better Business Bureau and consumer-based forums are providing insight into the poor experiences people are having. The issues aren’t going away though – there are many websites advertising great-looking clothes for cheap prices and every now and then, someone gets lucky and gets exactly what they were expecting.

For more information regarding potential copyright infringement and online scams contact Revision Legal’s Copyright and E-Commerce attorneys through our contact form, or call 855-473-8474.


Image courtesy of Flickr user lil’_wiz.

How Copyright Infringement Works in Online Retail Scams

The practice described above — taking photographs from celebrity social media accounts, fashion blogs, and independent photographers, cropping out identifying information, and using those photographs to sell products — is textbook copyright infringement under 17 U.S.C. § 501. The copyright in a photograph vests at the moment of creation in the person who pressed the shutter. That means fashion bloggers, independent photographers, and celebrities who photograph themselves own the copyright in their images. When an overseas company reproduces those images on its website without authorization, it infringes the reproduction right (17 U.S.C. § 106(1)) and the display right (17 U.S.C. § 106(5)).

The challenge for rights holders is enforcing those rights against companies located in China and other jurisdictions with limited cooperation mechanisms. A federal copyright lawsuit in a US court requires personal jurisdiction over the defendant — meaning the defendant must have sufficient contacts with the United States to be sued here. For Chinese e-commerce companies that operate English-language websites, accept US credit cards, and target US consumers through Facebook advertising, a strong argument exists that they have minimum contacts with the United States sufficient to establish personal jurisdiction. But winning the lawsuit is only half the problem; collecting a judgment from an overseas defendant is often much harder.

The DMCA Takedown Process and Its Limits

For rights holders whose images are being used without authorization on websites hosted in the United States — or on US-based platforms like Facebook, Instagram, and Pinterest — the Digital Millennium Copyright Act (DMCA) provides an expedited mechanism for removing infringing content. Under 17 U.S.C. § 512(c), a copyright owner can send a written notice to the platform’s designated DMCA agent identifying the infringing material and requesting its removal. Platforms that receive valid takedown notices must act expeditiously to remove or disable access to the infringing material or lose their safe harbor protection from monetary liability.

Facebook and Instagram both have DMCA reporting tools that allow rights holders to report infringing images and have them removed relatively quickly. However, these tools address the symptom — the specific infringing image on a specific platform — not the underlying problem. The company can repost the same image or upload a slightly modified version, and the cycle begins again. For persistent infringers, repeated DMCA notices combined with a formal enforcement strategy are more effective than individual takedowns.

The DMCA’s notice-and-takedown system has well-known limitations in the context of e-commerce scam operations. These companies often operate multiple websites simultaneously, shift to new domains when takedowns succeed, and use shared hosting arrangements that make it difficult to identify and contact the correct platform for takedown purposes. Rights holders who face systematic infringement — not just a single instance of copying — need a more comprehensive enforcement approach.

Platform Liability: When Is Facebook Responsible?

Facebook’s response to the SammyDress and DressLily advertising controversy — that its policies focus on the ad itself rather than the quality of the advertised goods — reflects the legal framework that governs platform liability for user-submitted content. Section 230 of the Communications Decency Act, 47 U.S.C. § 230, immunizes platforms from liability as publishers of third-party content. Under this framework, Facebook is not liable for the deceptive advertisements placed by infringing companies — it is not the “publisher or speaker” of that content for purposes of liability under state consumer protection law or federal deception law.

However, Section 230 immunity does not extend to platforms’ own conduct. Facebook’s advertising algorithm selects and serves ads to targeted users; to the extent Facebook actively selects, promotes, or curates infringing advertisements, it may face arguments that it is not acting as a passive conduit but as a contributor to the infringement. The Federal Trade Commission has also signaled that platforms cannot entirely disclaim responsibility for the deceptive advertising they knowingly facilitate.

Consumer Protection Law and E-Commerce Fraud

Beyond copyright infringement, the practices of companies like SammyDress and DressLily implicate multiple consumer protection frameworks:

  • FTC Act, Section 5. Showing pictures of a high-quality dress while delivering a materially different, lower-quality product is a deceptive trade practice. The FTC has jurisdiction to pursue these claims when the company has US operations or conducts US sales, though enforcement against overseas companies is practically difficult.
  • State consumer protection laws. Most states have mini-FTC acts that prohibit deceptive trade practices and provide private rights of action, including California’s Consumer Legal Remedies Act (CLRA) and Unfair Competition Law (UCL). Individual plaintiffs or class action representatives can sue under these statutes when purchases are made in connection with deceptive representations.
  • Credit card chargebacks. For individual consumers who received products materially different from what was advertised, credit card chargeback procedures under Regulation Z provide a practical remedy. Consumers who file chargebacks documenting the discrepancy between what was advertised and what was received generally prevail, and repeated chargebacks create pressure on payment processors to terminate merchant accounts.

What Rights Holders Can Do

Photographers, bloggers, brands, and individuals whose images are being used without authorization on e-commerce scam sites have a multi-pronged enforcement toolkit:

  • Register copyrights promptly. Copyright registration is a prerequisite to filing a federal infringement suit and enables recovery of statutory damages (up to $150,000 per willfully infringed work) and attorney’s fees. For content creators, maintaining a registration practice — particularly for high-value or widely distributed images — substantially increases enforcement leverage.
  • Issue DMCA takedown notices to hosting platforms and social media networks. Keep records of all notices issued and responses received.
  • File complaints with the FTC, relevant state attorneys general, and the Better Business Bureau. Regulatory agencies use complaint data to identify patterns and prioritize enforcement resources.
  • Work with payment processors and advertising platforms. Payment processors and advertising networks (Facebook, Google) have their own merchant and advertiser policies that can be used to cut off the revenue streams that sustain scam operations.

Talk to an Attorney

If your images or brand are being used without authorization on e-commerce platforms, prompt enforcement action can limit the damage and, in cases of willful infringement, result in significant damages awards. Revision Legal’s copyright and e-commerce attorneys handle enforcement actions against domestic and overseas infringers. Contact us through the form on this page or call 855-473-8474.

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