Alibaba’s U.S. Notorious Market Public Condemnation Well Deserved

E-commerce giant likely the greatest proliferator of fake goods.

March 9, 2017, Los Angeles, CA – The Office of the United States Trade Representative publicly condemned Alibaba, adding the e-commerce giant (again) to the U.S. Notorious Markets List – reserved for the world’s most notorious markets for counterfeit goods. The action is well deserved.

Alibaba, appropriately named after the fable “Ali Baba and the 40 Thieves,” dismissed the embarrassing disapproval and setback for CEO Jack Ma as influenced by the current political climate. But it’s hard to reconcile that excuse with Alibaba’s actions at the direction of Jack Ma.

Ma wants China’s top lawmakers to come down hard on counterfeiting, and jail time for those who sell them.

• Tough language from a CEO whose websites facilitate and enable distribution of counterfeits throughout the world. In fact, it’s Alibaba who can’t knock off the knockoffs, which may channel enforcement action directly at Ma.  In a quote to Bloomberg, “There is a lot of bark around stopping counterfeits, but no bite,” says Ma, sounding more like criticism he should be taking than giving.

In June, 2016 CEO Jack Ma publicly proclaimed “The problem is that the fake products today, they make better quality, better prices than the real products, the real names.”

• Ma seems to dismiss the millions, perhaps billions of dollars manufacturers spend researching and building products and brand, reputation, advertising, distribution, staff, storefronts, warranty service, customer base and shareholder confidence. Then a counterfeiter steps in and takes advantage of the superior value and reputation of the real product. Of course, Alibaba profits from the counterfeit transactions.   

In October 2016, Alibaba claimed it tightened policies against copyright infringement and made it easier for brands to request fakes be removed. However rights owners are even more challenged in removing and preventing counterfeit goods from the website.

• In addition to rights holder’s complaints, The Counterfeit Report, a consumer advocate and authorized agent for rights holders, spent months attempting to use the Alibaba required upgrades for its existing enforcement procedures implemented in October 2016. Prior to facing the circuitous, cryptic and completely dysfunctional Alibaba upgraded system, The Counterfeit Report found and reported 8.5 million infringing items on Alibaba websites on behalf of just a handful of rights holders. The Counterfeit Report has yet to submit a successful complaint on Alibaba’s new system.

In October 2016, Alibaba claimed it tightened policies against infringement, touting that it took down 380 million product listings and closed about 180,000 stores, just on its Taobao.com subsidiary in the previous 12 months

• What Alibaba didn’t reveal in the PR stunt is why more than double the counterfeit items of 2015 were allowed to be listed, how many duped consumers already purchased the products, and how many items were simply relisted – a common practice.

Inexplicably, Alibaba, a billion dollar company, does not even have telephone customer or intellectual property infringement support. Calls to U.S. Corporate Headquarters (408) 785-5580 go unanswered, and there is no response to messages left.

Alibaba states “it’s a brand’s responsibility to protect its own brand.”  Yet, in contrast to its claim, Alibaba says it needs to investigate complaints of infringement, an enormous and implausible task that may take weeks, considering the 100,000 brands and millions of infringing trademarked items offered on the website.  

• For example, Alibaba “investigators” claimed the counterfeit items purchased below were authentic, refusing Alibaba’s refund guarantee and seller discipline. Both the sellers, and items, remain on AliExpress.  

1. The Bureau of Diplomatic Security (DS) is the security and law enforcement arm of the U.S. Department of State. The United States Diplomatic Security Service provides protection to the U.S. Secretary of State, the U.S. Ambassador to the United Nations, U.S. Government personnel and dignitaries while at U.S. diplomatic missions abroad, and visiting foreign dignitaries in the United States. Selling fake badges endangers U.S. security personnel, national security, and makes the items available to terrorists. Defying common sense, the claim was denied and the sellers and items remain on AliExpress.  (Real badge image credit: U.S. Dept. of State)
2. TRX Suspension Trainers are common counterfeits on Alibaba websites. The seller of this TRX trainer kit admitted the item was counterfeit in Alibaba messaging, and supporting documents from the manufacturer were provided to Alibaba. The claim was denied and the sellers and items remain on AliExpress. 

All sorts of dirty things are involved in counterfeiting; terrorism, child labor exploitation, kidnapping, money laundering and organized crime. China is the undisputed nexus of worldwide counterfeiting, producing about 90% of fake goods which are then easily marketed on e-commerce websites; Alibaba (BABA), eBay (EBAY), Amazon (AMZN), Facebook (FB) and others.

Yet, in Alibaba’s Intellectual Property Protection (IPP) website splash screen post, spokesperson Michael Evans attempts to refute counterfeit allegations claiming “The persistence of some level of counterfeit listings on a platform the scale of Alibaba despite our massive efforts is not evidence of insincerity, bad faith, a lack of adequate expenditure. We are not claiming perfection, but we are claiming progress, along with an unwavering commitment to continue this fight by partnering across industries and borders with others to solve this global problem.”

Actions speak louder than words.

Jack Ma, China’s bad-boy of counterfeits, can adopt real and effective solutions in clear, truthful and professional manner to end the counterfeiting problem he enables.

Will he, or just continue as being known as the go-to sites for fakes?