Chinese e-Commerce Giant Alibaba Faces Counterfeit Charges
International e-commerce giant Alibaba Group Holding Ltd. has found itself fighting a new battery of charges that many of the goods that appear on its websites are counterfeit.
The latest charge comes from the American Apparel & Footwear Association (AAFA), which recently requested in a recent letter sent to U.S. Trade Representative (USTR) Michael Froman and the U.S. Securities & Exchange Commission that Washington, D.C. prompt the Chinese company into action against fake goods.
According to the April 8 correspondence, the Arlington, Virginia-headquartered trade group said that it was “convinced Alibaba was either incapable or not interested in addressing the problem,” adding that the company’s measures to curb counterfeit goods have been “sluggish.”
Charges that Alibaba offers counterfeit goods on its platforms, including online marketplaces Taobao and Tmall, have circulated since entrepreneur Jack Ma founded the company in 1999. The company’s Taobao platform connects mostly small vendors with Chinese customers, while mostly larger companies run online stores on its Tmall platform.
In 2012, the USTR removed Taobao from its roster of “notorious markets” because of the progress it said Alibaba had made in tackling the problem. In its letter, though, the AAFA asserted that since Taobao had been delisted, the problem has worsened, urging the USTR to send “a clear signal” that the removal would be reversed “unless more action was taken.”
U.S. TRADE REPRESENTATIVE “KEEPING AN EYE” ON ALIBABA
Prior to the AAFA letter, the USTR said last month it was keeping an eye on Hangzhou, China-based Alibaba for sales of counterfeit and pirated goods, but refrained from putting the site back on the product piracy blacklist.
In response to AAFA’s charges, Alibaba said it has implemented a range of measures to fight counterfeits on its websites, including data mining, random product checks, offering an online complaint form, working with authorities in Beijing, and cooperating with more than 1,000 brand owners and several industry associations.
“Our track record of fighting illicit activities is clear,” said an Alibaba spokesperson. “Like all global companies in our industry, we must continue to do everything we can to stop these activities.” The company, the spokesperson added, has been in discussions with the AAFA since 2012 over how best to tackle the issue “and was committed to continuing to do so.”
In 2014, the Alibaba Group generated $8.4 billion in revenues and raised $25 billion in the U.S. to generate the world’s largest initial public offering.