As a U.S. trade agency considers whether to add Alibaba Group Holding Ltd. to a list of marketplaces notorious for selling counterfeits, nearly a dozen trade groups are complaining that the Chinese e-commerce giant isn’t doing enough to root out fake goods.
In a letter sent to Alibaba in late August, trade groups including the Union des Fabricants, the French Federation of Leather Goods and the Federation of the Swiss Watch Industry said that while Alibaba has taken “a great number of concrete steps” in its attempt to address fake items, it has failed to deliver on many promises that could permanently reduce the volume of counterfeits on its platforms.
For instance, the group wrote, Alibaba’s software doesn’t detect images of fake products that are blurred, even though the e-commerce company has said that such images violate its rules.
Brands want to trust Alibaba, but the e-commerce giant’s repeated promises to tackle counterfeits “compel us to focus on what has not improved,” according to the letter seen by The Wall Street Journal. “Trust cannot be hostage to delay.”
Alibaba said Thursday that it appreciates the letter’s constructive tone and looks forward “to working closely with the brands represented by the trade groups, many of whom have already built successful online businesses on Alibaba platforms.” Alibaba has said previously that it will spare no expense in tackling fake goods sold on its platforms.
Separately, the American Apparel & Footwear Association, a U.S. trade group that represents more than 1,000 brands, said on Thursday that it had “seen no evidence of improvement. Taobao is still flooded with counterfeits while the takedown procedures remain as complicated and burdensome as ever.” Taobao, Alibaba’s largest platform, is an online bazaar for things as diverse as towels and tires.
The latest outcry comes at a sensitive time for Alibaba, as the U.S. Trade Representative is requesting public comments on which foreign sites to include on its list of marketplaces notorious for counterfeit goods. The Chinese government is also scrutinizing fake goods sold online in China.
In 2012, the USTR removed Alibaba’s Taobao platform from its list of offending marketplaces, citing improvements that Alibaba had made in monitoring counterfeit goods on the platform. But last year the agency said that it had grown “increasingly concerned” about the sale of counterfeit goods on Alibaba’s platforms. While declining to put Taobao back on the list, the USTR said it would look for evidence next year that Alibaba is taking “demonstrably effective” measures in addressing counterfeits on its sites.