The Office of the U.S. Trade Representative (USTR) once again zeroed in on China and WeChat in its annual Notorious Markets List.
Released Tuesday, the USTR’s 2022 Review of Notorious Markets for Counterfeiting and Piracy identified the world’s most populous country as “the number one source” of counterfeit products and WeChat as “one of the largest platforms for counterfeit goods in China.”
Though Covid-19 restrictions reduced foot traffic at many Chinese physical markets, counterfeit sellers “increasingly” used their brick-and-mortar storefronts as points of contacts for customers and centers for online sales fulfillment, the USTR reported. This development resulted in these markets remaining “key centers” for counterfeit sales in China’s largest cities, it said. Additionally, while pandemic-related trade disruptions led to a slowdown in exports from countries known to produce counterfeit goods—such as China—the USTR found this to be offset in some instances by the localization of counterfeit production.
The Notorious Markets report again highlighted WeChat and its China-facing sister app Weixin. Although the Tencent-owned platform primarily functions as an instant messaging and social media app, the USTR said counterfeiters use WeChat’s “Channels” short video feature to advertise fake goods to users, who can then buy the goods on the app.
The USTR declared Tencent’s efforts to combat counterfeiting “inadequate.” Though the tech titan encourages brand owners to supply keywords for WeChat’s brand protection database, for example, it only appears to apply these keywords to account name registration or name change requests, the USTR said.
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The Notorious Markets list also once more identified Alibaba’s AliExpress platform. Though the USTR praised Alibaba for its anti-counterfeiting processes, saying they are, as a whole, “among the best in the e-commerce industry”, it took issue with AliExpress’ lack of “effective” seller vetting and repeat infringer controls.
The report also highlighted Shopee, an online and mobile e-commerce market based in Singapore that the American Apparel & Footwear Association (AAFA) nominated for the report in October. The company operates individual country-focused platforms primarily serving Southeast Asia, Europe and Brazil. Right holders have reported overall high volumes of counterfeits and complained of “cumbersome and duplicative processes” among its country-focused platforms, differing requirements for takedown requests and slow response times, the USTR said.
Though the Notorious Markets report left off the AAFA’s other nominee for the 2022 list—Facebook and Instagram parent company Meta—the association still welcomed the report and thanked the USTR Tuesday for considering its comments.
“Today’s Notorious Markets Report by USTR echoes our concerns and reemphasizes the administration’s commitment to highlighting platforms and markets annually that contribute to our growing counterfeit problem,” AAFA president and CEO Steve Lamar said in a statement. “The U.S. must not only set the international standard but must also practice what we preach by doing the same as we are asking of others to ensure real and effective checks and balances for online purchases, providing a template for international partners with much-needed proactive measures to try to stop counterfeits before they are even listed.”