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Alibaba’s Taobao Added to Notorious Markets List for Counterfeits

Counterfeits have been an increasing problem in the e-commerce space and China—more specifically, among Alibaba and its e-companies—have been the biggest targets.

Alibaba Group Holding was put back on the U.S. Trade Representative’s (USTR) naughty list, better known as the annual Notorious Markets list, a list flagging global marketplaces known for carrying counterfeit goods.

Taobao, Alibaba’s online market for often unbelievably-cheap goods, was specifically called out in the report.

“The e-commerce platform is an important concern due to the large volume of allegedly counterfeit and pirated goods available and the challenges right holders experience in removing and preventing illicit sales and offers of such goods,” the report noted.

Taobao currently stands as one of the 15 most popular websites in the world (based on Alexa rankings), and in 2015, the site’s mobile app was the top e-commerce app in China.

However, despite continuous calls to its parent company, Alibaba, to quell the rampant counterfeiting on its site, USTR said Taobao still hasn’t tried to understand and utilize basic intellectual property enforcement procedures.

According to the USTR report, “Right holders report that initial attempts to report IPR infringement are refused inconsistently; denials of takedown requests contain little to no justification or guidance on how the right holder may amend its notification to get results; error messages stall or prevent use of IP complaint systems; pertinent communications to right holders are not translated from Chinese; and broken hyperlinks prevent direct communication between right holders and Taobao sellers.”

Alibaba seems to think, however, that its placement back on the notorious markets list is unjust and said in a statement that the company is now more effective in its intellectual property protection than when USTR took it off the list in 2012.

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“The decision ignores the real work Alibaba has done to protect IP rights holders and assist law enforcement to bring counterfeiters to justice,” the company noted.

Whichever may be true, apparel companies and retailers appear pleased with the decision.

“Today’s action shines a renewed spotlight on the considerable concerns we and others continue to see on Alibaba platforms,” Rick Helfenbein, president and CEO of the American Apparel & Footwear Association (AAFA), said in a statement. “In the coming year, we will work with our members, USTR and other government agencies, outside stakeholders, and Alibaba itself to seek sustained improvements that lead to the permanent removal of counterfeits from these online platforms.”