Alibaba's Counterfeit Crackdown Is Just More Lip Service

Alibaba snubs brand owners, counterfeit products continue to flood the market

June 18, 2019, Los Angeles, CA – Alibaba's notorious counterfeit marketplace has done some chest pounding lately. Matthew Bassiur, Alibaba’s head of global intellectual property enforcement, says the company is now operating an industry-leading anti-counterfeit program. Is it more fiction than fact?

In reality, Alibaba (NASDAQ: BABA) continues to snub brand owners and flood the market with an inexhaustible supply of counterfeit, fraudulent, and replica goods. Appropriately named after the fable “Ali Baba and the 40 Thieves,” Alibaba and it's subsidiary websites (AliExpress.com, Taobao.com, 11main.com, etc.) offer counterfeit products directly to consumers, and by extension to fraudulent resellers on Amazon, eBay, Walmart, and other e-commerce websites.

• Peter K. Navarro, White House assistant to President Trump for trade and manufacturing policy, wrote a harsh condemnation in the WSJ; "when you purchase brand-name goods through online third-party marketplaces like Alibaba, Amazon, and eBay, there’s a good chance you’ll end up with a counterfeit."
• Alibaba was publicly condemned by The Office of the United States Trade Representative, and landed on the U.S. Notorious Markets List - a designation is reserved for the world's most notorious markets for counterfeit goods. Yet, Alibaba continues to be the go-to source for counterfeit, fake and replica products.
• Crushing China's intellectual property theft is a White House negotiating point in China trade and tariff deliberations, but counterfeit products will continue to fly under the radar.

In stark contrast to Alibaba's brand protection claim; "Listings of counterfeits, replicas, or other unauthorized items are prohibited on the Site strictly," The Counterfeit Report, an award-winning industry watchdog and consumer advocate, found and removed over 325 million infringing items on Alibaba websites on behalf of brand owners. That's one counterfeit for every man, woman, and child in the USA. The global giant is a prudent first-stop for brand-owners to determine if their product is counterfeited.

Glaring inaction on infringement complaints, a dysfunctional reporting system, and sellers who often relist are illustrative of, and better describe the ineffectiveness of Alibaba's anti-counterfeit program. Counterfeit complaints are ignored, acceptance of unrealistic new reporting terms and conditions is required, and communications go unanswered. The counterfeit items often reappear, consumers are deceived, and manufacturers and retailers are being harmed in a big way with little recourse.

There are an estimated 450,000 brands in the world, dwarfing Alibaba's touted collaboration and information sharing with "upwards of 130 leading brands." While Alibaba claims 96 percent of takedown requests were handled within 24 hours, The Counterfeit Report found that takedowns usually take at least a week, sometimes several weeks and dozens of complaints, or the extreme of making a corroborating test purchase. Even so, sellers simply relist the same items.

Alibaba's co-founder and bad-boy of counterfeits, Jack Ma, is politically attached to the Communist Party and has now stepped down as CEO. While the lines between business and politics have become increasingly hazy, the relationship between China's government and leading internet companies continues to mature. Alibaba and subsidiaries are best avoided.

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 the world's largest criminal enterprise.