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Alibaba Fights to Stay Off USTR Blacklist for Fakes

Alibaba fakes

Chinese e-commerce company Alibaba Group Holding Ltd. is going to great lengths to ensure it stays off the United States Trade Representative’s (USTR) blacklist for continuing to allow sales of counterfeit goods on its shopping platforms.

People familiar with the matter told Reuters that Eric Pelletier, Alibaba’s government affairs chief, has sent two formal letters to USTR this month, contesting criticism by the American Apparel & Footwear Association (AAFA), which recently lobbied for the company’s Taobao marketplace to be re-listed as a “notorious” market for selling fake clothing, shoes and handbags.

In his letters, Pelletier said Alibaba has gone above and beyond in dealing with the problem, but that primary responsibility for policing and deterring infringements rests with brand owners, according to copies seen by Reuters.

He said the company put new rules in place earlier this year to make it easier for brands to remove problematic listings while penalizing merchants who violate company policies.

“When you step back and look at our overall efforts to combat illicit activities, our track record is clear. We are certainly not perfect and we have a lot of hard work ahead of us… We will continue to do everything we can to stop these activities,” Pelletier wrote.

He and a lawyer also met last week with an inter-agency working group coordinated by the USTR to discuss the company’s anti-counterfeit efforts.

More to do and Taobao were on the blacklist from 2008. The former was removed in 2011 while the latter was taken off the following year under the condition that it would step up its practices.

But at least three groups, including the AAFA, are insisting that Alibaba isn’t doing enough to combat the sale of fakes.

“Our members face enormous difficulty working with Taobao in solving the problems of counterfeits, meanwhile illegal merchandise continues to proliferate,” said AAFA President and CEO Juanita Duggan. “The sheer volume of counterfeits on the site as reported by our members, along with the company’s unwillingness to make serious reforms is why, after three years, we feel it is necessary to recommend that Taobao be added back to the list and that the U.S. elevate the pressure on them to make substantive, measurable improvements to the counterfeit problem.”

Unnamed industry sources told Reuters that Alibaba has made “patchy progress.” “It was a mistake to take them off of the ‘notorious markets’ list,” said one.