Alibaba's Notorious Market Condemnation Well Deserved

Despite public ridicule, the e-commerce giant is still the go-to website for fake goods.

July 26, 2018, Los Angeles, CA – E-commerce giant Alibaba (NYSE:BABA) has an enormous counterfeit problem. Repeatedly condemned by The Office of the United States Trade Representative, the website continues to be the go-to source for counterfeit, fake and replica products.

The "Notorious Market" designation is well deserved, but the warning isn't reaching consumers or solving the problem. Alibaba online sales and profits surpassed all U.S. retailers (including Walmart, Amazon and eBay combined).

Alibaba, appropriately named after the fable “Ali Baba and the 40 Thieves,” and its subsidiary websites (AliExpress.com, Taobao.com, 11main.com, etc.) offer an inexhaustible supply of counterfeit products directly to consumers, and fraudulent resellers on Amazon, eBay, Walmart and other e-commerce websites.

Despite claims from Alibaba Group President Michael Evans that the company has worked above and beyond to protect brands, the fact is the company ignores its own policy and counterfeit notifications from right holders. The counterfeits remain, consumers are deceived, and manufacturers and retailers are being harmed in a big way with little recourse.

In addition to trademark, copyright and patent infringement, Alibaba makes this illusory claim on its website; "Listings of counterfeits, replicas, or other unauthorized items are prohibited on the Site strictly" - but that is not true. Alibaba admits to hundreds-of-millions of counterfeit listings on its websites, and in simplest terms, counterfeiting is stealing.

Alibaba claimed it tightened policies against infringement in 2016, touting that it took down 380 million product listings and closed about 180,000 stores in the previous 12 months, just on its Taobao.com subsidiary. For 2017, store closures grew to 240,000 - hardly representative of any success. Alibaba didn't comment on how many items had already been sold to deceived consumers, or that the duped buyers had been notified and refunded.

Jack Ma, Alibaba's CEO and bad-boy of counterfeits, wants China’s top lawmakers to come down hard on counterfeiting, including 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, and enforcement action should be directed 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.

Alibaba purports to be on a mission to fight the rampant counterfeiting problem on its platform, and make it easier for brands to remove fakes, but that's also not true. Alibaba's "AliProtect" counterfeit enforcement program presents a gauntlet of obstacles, cryptic conflicting instructions, and absurd responses to right holder's notifications. Infringement notices are repeatedly ignored, or receive automated responses including; "The trademark in question and / or its similarities is not found in the listing.  Please advise where the infringement part is in the listing" or "the mark used does not embody the distinctive portion of your alleged trademark." Apparently, Alibaba has determined it is an expert in the millions of infringing trademarks and counterfeit products offered on its websites.

Contrasting Alibaba's brand protection claims, The Counterfeit Report, an award winning industry watchdog and consumer advocate, found and removed over 25 million infringing items on Alibaba websites on behalf the right holders. Inexplicably, test purchases were ignored, refunds denied for counterfeit products, and communications went unanswered.

Alibaba, a billion dollar company, doesn't even have telephone customer or intellectual property infringement support. Calls to U.S. Corporate Headquarters - (408) 785-5580 - go unanswered, are disconnected, or instruct that a message be left.

Companies that enable and facilitate criminal activity and profit from dishonest sales which impact consumer safety, jobs and public trust create a public perception of deception and impunity. The consequence is destroyed U.S companies and retailers, lost U.S. jobs and duped consumers. The value of counterfeit and pirated goods is forecast to grow to $2.8 trillion, and cost 5.4 million net job losses by 2022 states a 2017 International Chamber of Commerce Report. Counterfeiting is now the world's largest criminal enterprise.

Congress can act to protect consumers, collect taxes, impose tariffs and use the same internet connection filters currently used to detect and block terrorism, sexual predators and other crimes to block Alibaba and its subsidiaries. Will they?