Krystal’s, a small sporting goods store in Albuquerque, New Mexico, recently filed a class action lawsuit against Facebook over advertisements for counterfeit football jerseys on its pages. According to Krystal’s, these ads have substantially hurt business. The sporting goods store also named two other companies in the lawsuit that help Chinese companies that produce these jerseys to advertise on Facebook.

Facebook is dedicated to taking down counterfeit ads and fake profiles, but retailers like Krystal’s can be hurt by these advertisements simply by their own ads’ proximity to them. The counterfeit products are much cheaper than the real deal that companies like Krystal’s advertise. They can also be hurt by having their name associated with a counterfeit brand.

“Krystal’s has inadvertently been placed in the untenable position of actually lending credence to the counterfeit ads, by virtue of Facebook’s display of those advertisements on Krystal’s page,” the company’s complaint read. “Krystal’s has lodged public and private complaints with Facebook, but has received no meaningful reply or response.”

The lawsuit raises some interesting points about counterfeit advertising on Facebook. The site has a team that takes down counterfeit ads that are brought to their attention, but with anything the size and scale of Facebook (1 billion users and counting!) a few bad ads are virtually guaranteed to fall through the cracks. Do you think Facebook should be doing more to root out these phony ads? Should they lean more heavily on companies to police themselves and each other?

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