Alibaba Group Holding Ltd. has been put back on a U.S. agency’s list of global marketplaces known for counterfeit and pirated goods.
The U.S. Trade Representative’s annual list, released Wednesday, highlights physical and online markets “notorious” for fakes. It specifically mentions Alibaba’s flea-market-like Taobao shopping platform, which hadn’t made the list in years, citing rights holders’ complaints regarding obstacles to removing counterfeit items from the site.
“The Taobao.com e-commerce platform is an important concern due to the large volume of allegedly counterfeit and pirated goods available and the challenges right holders experience in removing and preventing illicit sales and offers of such goods,” the agency said.
Alibaba said it was disappointed by the decision, and questioned whether it might have been influenced by the current political climate.
“We are far more effective and advanced in [intellectual property rights] protection than when the USTR took us off the list four years ago,” Michael Evans, president of Alibaba Group, said in a statement. “The decision ignores the real work Alibaba has done to protect IP rights holders and assist law enforcement to bring counterfeiters to justice.”
Related CoverageAlibaba’s Efforts to Stop Sale of Counterfeit Goods Under Fire (Oct. 8) Alibaba Failing to Deliver in Fight Against Fakes, Say Brands (Sept. 1) Alibaba Faces Backlash Over Promises on Counterfeits (June 16)
The notorious markets list names and shames companies and countries that allegedly don’t take steps to stop counterfeiters, and doesn't set official U.S. policy. But the prominence of the list can bring significant pressure to Washington’s international negotiations and interactions with companies, and U.S. lawmakers frequently cite the markets enumerated on the list.
Taobao was removed from the list in 2012, as the USTR cited improvements the company had made in monitoring counterfeit goods.
Last year, however, the agency warned it had grown “increasingly concerned” about counterfeits and would be looking to see if Alibaba was taking steps to address that issue.
In its new report, the USTR alleges attempts to report infringement to Alibaba are “refused inconsistently” and requests to take items off the site are denied without guidance on how to get results. Some messages aren’t translated from Chinese, and there are other issues with communication.
The agency added that while Alibaba has initiated a program aimed at helping with this, it remains out of reach for a number of brands because of the difficulty of eligibility. “While recent steps set positive expectations for the future, current levels of reported counterfeiting and piracy are unacceptably high,” the agency said.
Trade groups earlier this year called for Alibaba to be added back to the list, saying they were making the request because “an enormous amount of counterfeits” remain on the e-commerce company’s sites. Alibaba said at the time sales of counterfeits damage its business as much as it hurts brands.
The American Apparel & Footwear Association, one of the organizations that had called for that action, said Wednesday it commended the decision.
“Today’s action shines a renewed spotlight on the considerable concerns we and others continue to see on Alibaba platforms,” said Chief Executive Rick Helfenbein. He added the group will work with its members, the government and Alibaba “to seek sustained improvements that lead to the permanent removal of counterfeits from these online platforms.”
—William Mauldin contributed to this article.
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