Chinese online retail giant Alibaba has managed to stay off the US government’s annual Notorious Markets List. The company’s Alibaba.com was dropped off the list in 2011 and Taobao marketplace was removed from the list in 2012. But rampant sales of fake and counterfeit goods on its platforms are no secret. Earlier this year, French luxury goods giant Kering dragged the Hangzhou-based company to court for promoting the sale of fake goods.
USTR to monitor Alibaba’s efforts over the next year
That’s why the American Apparel & Footwear Association (AAFA) had urged the US Trade Representative (USTR) to relist Taobao in Notorious Markets List. The USTR stopped short of putting Taobao on the list. But the federal agency warned the e-commerce giant that its efforts to fight counterfeiting would be monitored over the next year for visible signs of improvement.
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The USTR said it was “increasingly concerned” by reports from the intellectual property rights holders that the company’s enforcement program was difficult to use, too slow, and lacking transparency. The federal agency asked Alibaba to simplify the process for rights holders to lodge complaints and seek action against counterfeit goods sellers. The USTR also urged the Chinese company to drastically reduce the timeline for removing fake goods and levying penalties against sellers.
Alibaba had been lobbying hard to stay off the list
Though the relisting doesn’t carry direct penalties, it could have been a big blow to the Jack Ma-led company, which has been trying to shed perceptions that its sites are riddled with fakes. Relisting could have further tarnished its image and dragged down its stock price, which is listed in the US. Over the last few months, Alibaba had been lobbying hard in the US to stay off the Notorious Markets List. In October, Alibaba founder Jack Ma said his company itself was the biggest victim of counterfeiting.
In an emailed statement to Bloomberg, the Hangzhou-based company said it was committed to protecting the intellectual property rights and fighting against counterfeiting. Alibaba said counterfeiting was an issue that every e-commerce company in the world faced.