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AAFA Calls Out Alibaba for Counterfeiting—Again

Alibaba’s counterfeit dilemma is in the spotlight again, thanks to another major industry organization.

The American Apparel & Footwear Association (AAFA) again asked the Office of the United States Trade Representative (USTR) to re-list the Chinese business and its related e-commerce platforms as a Notorious Market.

AAFA’s request was part of its submission for the USTR’s “2016 Special 301 Out of Cycle Review of Notorious Markets,” an annual list that alerts the public about retailers that are reportedly involved in trademark counterfeiting. The association’s submission includes 117 other online and physical marketplaces that don’t properly regulate counterfeit merchandise sales. The USTR delisted Alibaba in 2012, after the Chinese company agreed to clean up its act and prevent the sale of counterfeit merchandise.

“USTR removed Alibaba from its list several years ago, on the condition that the company meet specific requirements going forward,” AAFA CEO and president Rick Helfenbein said. “Those requirements have not been met, and as a result American consumers and our members are paying the price.”

In AAFA’s formal letter, the association noted how Alibaba failed to follow the USTR’s guidelines to prevent counterfeit merchandise sales on its channels. Research from the State Administration for Industry and Commerce, a Chinese government agency, was also included in the letter for evidence. The research demonstrated that more than two-thirds (67 percent) of products sold on Alibaba’s e-commerce platform, Taobao, were fake.

AAFA’s submission follows Alibaba’s recent court case with Kering, which involved the French luxury business suing Alibaba for promoting counterfeit merchandise sales on its Gucci and Yves Saint Laurent sites. Although a federal judge dismissed some of Kering’s claims against Alibaba, the company is still scrutinized by other apparel and industry affiliates. In fact, while Alibaba pledged to the International AntiCounterfeiting Coalition (IACC) in April, it was suspended after a month.

Rebuttal comments about AAFA’s submission will be due to the USTR this month.