Alibaba Lands Again on U.S. Government List for Fakes

The Office of the U.S. Trade Representative on Friday (USTR) listed Alibaba’s Taoboa.com marketplace on its list of Notorious Markets as a source of fake and pirated merchandise.

The USTR report makes the following accusations:

“A high volume of infringing products reportedly continue to be offered for sale and sold on Taobao.com and stakeholders continue to report challenges and burdens associated with IP enforcement on the platform. In particular, SMEs continue to have problems accessing and utilizing takedown procedures on Taobao.com. In 2017, more SMEs have requested assistance from U.S. government agencies and embassies regarding Taobao.com than any other eCommerce platform.”

To read the complete findings about Taoboa.com by USTR, click here (PDF)

The agency did state that Alibaba has taken steps to improve Intellectual Property (IP) protections for stakeholders, but also said: “the enforcement program reportedly continues to be burdensome and insufficient to end the sale of counterfeit products on the platform.”

Alibaba Group President Michael Evans issued a statement after USTR released the 2017 Out-of-Cycle Review of Notorious Markets report.

Alibaba is doing more to protect brands and rights holders than any e-commerce company in the world, and we not only addressed, but went above and beyond, each specific concern raised by the USTR last year.

In light of all this, it’s clear that no matter how much action we take and progress we make, the USTR is not actually interested in seeing tangible results. Therefore, our inclusion on its list is not an accurate representation of Alibaba’s results in protecting brands and IP, and we have no other choice but to conclude that this is a deeply flawed, biased and politicized process.

The company also provided a point by point rebuttal to the USTR’s report’s claims. You can read the details here.

Another Blow to Alibaba in the United States

Just a few weeks ago, Alibaba’s Ant Financial had to call off a merger with MoneyGram as U.S. lawmakers effectively put insurmountable roadblocks in the path to approval.

While international expansion by Alibaba and its affiliates continues in much of Asia, it doesn’t seem U.S. lawmakers and government agencies look at the Chinese company in a favorable light.

Last year Alibaba and Ma tried to dazzle SMEs in Detroit and Toronto to bring more North American produced products to China. IP protections have always been a significant issue with many businesses in the west, but slowly the company has converted some brands.

Alibaba claims that its IP enforcement helped close more than 230,000 Taobao stores from September 2016 to August 2017.

The company has also stated it provided 1,573 leads to law enforcement resulting in more than 1,000 arrests and the closing of nearly 1,000 manufacturing and distribution facilities.

Combating IP infringements is a key ingredient to finding success in global eCommerce. The distrust among lawmakers and business owners that Alibaba can stop the notorious Chinese copying of products is significant.

Too many real looking cheap Chinese fakes have infiltrated western markets, and it will take some time to gain trust.

Not everything is as easy to spot as the fake Apple Iphone stovetop (see picture).

Alibaba cannot do it alone and the Chinese government needs to be part of the solution.

Have fake products impacted you? Do you think Alibaba is doing everything it can to stop fake products? Drop us a line in the comments section below.

Richard Meldner

Richard is co-founder of eSeller365. He has over 17 years of experience on eBay which includes tens of thousands of sales to buyers in over 100 countries and even has experience with eBay’s VeRO program enforcing intellectual property rights for a former employer. And for about two years Richard sold products on Amazon using Amazon FBA in the US.

To “relax” from the daily business grind, for a few weekends a year, he also works for IMSA as a professional race official.