Dive Brief:

• Alibaba Group Holding Ltd. gave in a little Tuesday after pushing back against allegations made by the American Apparel and Footwear Association that the Chinese commerce giant is complacent about fake products sold on its Taobao website.

• The American group had notified the U.S. Securities and Exchange Commission and other U.S. officials with information about fake products and urged an investigation, saying its own outreach to Alibaba had been ineffectual. AAFA said the problem worsened after it removed Alibaba from its “blacklist.”

• Alibaba initially insisted it is fighting counterfeiting and in fact working with the association in that effort, but also said it would step up efforts to combat the problem.

Dive Insight:

This is a major problem for Alibaba and its websites, especially Taobao, which is akin to eBay and therefore features many individuals and smaller, less known retailers. The problem of counterfeit goods is actually a problem for eBay, too, as well as for Amazon, and a sure-fire way to lost customer trust.

“Alibaba’s Taobao platform is notorious as one of the biggest platforms for counterfeit goods worldwide,” the AAFA wrote in its letter to U.S. Trade Representative Michael Froman. “The slow pace has convinced us that Alibaba is either not capable of or interested in addressing this problem.”