Alibaba bows to US pressure over fake goods

Alibaba, the Chinese ecommerce company, said it would tackle the prevalence of counterfeit goods sold on its websites, bowing to criticism from a US clothing industry lobbying group.

The American Apparel & Footwear Association (AAFA) said earlier this month that it was "frustrated" by Alibaba's lack of progress in addressing what it called rampant selling of fake goods that hurt its members' profits.

The lobby group also said the prevalence of counterfeit apparel and footwear had worsened since the USTR removed Alibaba from its "notorious markets" blacklist in 2012.

"Alibaba's Taobao platform is notorious as one of the biggest platforms for counterfeit goods worldwide," said the AAFA in a letter to US Trade Representative Michael Froman. "The slow pace has convinced us that Alibaba is either not capable of or interested in addressing this problem."

The reappearance of pressure on the USTR to punish Alibaba is the latest setback in what has already been a bruising year at the hands of regulators for the Hangzhou-based company.

In January, the State Administration for Industry and Commerce, a Chinese regulator, criticised Alibaba for numerous violations by its sellers - including tolerating bribery, counterfeit goods and faking seller rankings in a practice known as "brushing".

The USTR said last month it was monitoring Alibaba for sales of counterfeit and pirated goods, though it has not re-blacklisted the ecommerce group.

Alibaba said in response to the AAFA letter that it was taking the issue seriously, and was "dedicated to the fight against counterfeits because the health and integrity of our marketplaces depend on consumer trust".

It listed measures such as data mining, enhanced co-operation with the police and working with more than 1,000 brands to increase the effectiveness of its procedures to eradicate knock-offs.

The issue of fake goods, and the difficulty in policing the 8m third-party sellers on Alibaba's eBay-like sales website Taobao, has long been a public relations headache for the group.

In April 2012, the Chinese company hired high-powered Washington lawyer James Mendenhall, former general counsel in the US trade representative's office, to lead its effort to be removed from the blacklist, which it achieved that year.

Jack Ma, Alibaba's founder and largest shareholder, last year blamed "greedy" consumers for the prevalence of fake merchandise online. The message was not entirely consistent with Alibaba's carefully honed line that it took the issue seriously and was working on it.

"If you want to buy a Rolex for Rmb25 ($4), you can only be blamed for being too greedy," he said.

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