Trade groups lobby for Alibaba's return to USTR Notorious Markets list

Dive Brief:

Trade groups from North America, Europe and Asia signed a letter to the U.S. Trade Representative’s office stating that counterfeit sales are at “crisis levels” and urging the return of Chinese e-commerce conglomerate Alibaba Group to the agency’s Notorious Markets list of companies violating trademarks and copyrights.
“We are encouraging this step because of the enormous number of counterfeits that persist on Alibaba platforms, most notably [online marketplace] Taobao, but also on other platforms such as AliExpress,” the 18 trade groups (including the Federation of the Swiss Watch Industry, the Council of Fashion Designers of America and the Travel Goods Association) said in the letter dated Oct. 26.
While the USTR last year declined to put Alibaba on the blacklist, the organization did state that Alibaba and its Tmall and Taobao affiliates must work harder to excise counterfeits, and recommended steps to accomplish that effort.

Dive Insight:

Alibaba insists that it’s taking major steps to combat counterfeit sales in its operations and expanding its anti-counterfeiting measures. But earlier this month the American Apparel & Footwear Association and French anti-counterfeit group Unifab in separate letters urged the USTR to once again include Alibaba on its Notorious Markets list, published for the past decade as part of the organization's Congressionally-mandated “Special 301” report on the global state of intellectual property rights protection and enforcement.

While U. S. Trade Representative Michael Froman last year acknowledged ongoing problems with fake goods on Alibaba's sites, he noted that progress had been made. Earlier this year, Alibaba even made its way into the Washington, D.C.-based International AntiCounterfeiting Coalition, but that was short-lived: The organization suspended Alibaba's membership in May after outcry from global brands and members over its inclusion.

Brands were stunned in June when Alibaba executive chairman and founder Jack Ma, speaking at its first investor day conference, said that many knockoffs available on the company’s marketplaces are of better quality than the authentic products they mimic. Ma nevertheless pledged that Alibaba would continue to crack down on sales of counterfeit goods across its platform, and later sought to clarify his remarks in an editorial in The Wall Street Journal. But to some brands, the incident was yet another indication of Alibaba’s failure to really follow through on battling the problem.

In the letter sent to Assistant U.S. Trade Representative for Innovation and Intellectual Property Probir J. Mehta Wednesday, trade groups from across the globe asserted that while Alibaba is hardly the only marketplace with a problem selling counterfeits, it "has now become one of the largest e-commerce sites with hundreds of millions of subscribers and the ability to penetrate markets globally on a scale never before seen," adding "The wide availability of counterfeits on Alibaba platforms has been extensively noted by many stakeholders, governments and even Alibaba executives themselves."

The letter goes on to state that while Alibaba itself admits it has a problem with counterfeit goods, the e-commerce company has done little about the issue, and has failed to follow the steps recommended by the USTR in its report last year.

“While this increased attention is a welcome development, we have seen little evidence that there has been any noticeable change on the Alibaba platforms themselves,” the groups wrote. “At any given moment, a consumer around the world can chose from hundreds of thousands of counterfeit clothes, shoes, travel goods, handbags, toys, auto parts, jewelry, watches, furniture, electronics, pharmaceuticals, and other articles.”

Michael Evans, Alibaba’s president, said in a Thursday blog post that the trade groups’ “uninformed and misleading accusations” are counterproductive, The Wall Street Journal reports, adding that the existence of counterfeit items across Alibaba’s platforms can’t be construed as a sign that the company is not committed to combating bootleg goods.