Alibaba Suspends Counterfeit Enforcement For New Year Celebration

Brand-owners suffer when counterfeit complaints are ignored for weeks.

February 11, 2020, Los Angeles, CA – The Chinese New Year is nothing more than a third-rate news story unless you are U.S. brand-owner and your counterfeited products are sold on Alibaba, China's notorious counterfeit marketplace. Everything closes in China for several weeks, and everyone goes home. The counterfeits remain.

Well-deserved criticism describes Alibaba's glaring inaction on infringement complaints, its ineffective and dysfunctional reporting system, and the counterfeit sellers who often relist. But for now, while employees and China celebrate, counterfeit complaints languish for weeks while brand-owners, manufacturers, and retailers are harmed in a big way with little recourse.

Appropriately named after the fable “Ali Baba and the 40 Thieves,” Alibaba (and its subsidiary websites: AliExpress.com, Taobao.com, 11main.com, etc.) enable and facilitate the sale of an enormous number of counterfeit products directly to consumers, and by extension to fraudulent resellers on Amazon, eBay, Walmart, and other e-commerce websites through third-party marketplace sellers.

Matthew Bassiur, Alibaba’s head of global intellectual property enforcement, says the company is operating an industry-leading anti-counterfeit program. Is the claim more fiction than fact?

In stark contrast to Alibaba's claim, The Counterfeit Report, an award-winning industry watchdog and consumer advocate, found and removed over 370 million infringing items from Alibaba websites on behalf of just a handful of brand-owners. That's one counterfeit for every man, woman, and child in the USA.

Dr. Peter K. Navarro, White House top-advisor 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."

President Trump followed through last Friday with a crushing Executive Order and strong sanctions for not following "best practices" recommendations. The order describes the active role e-commerce platforms, online third-party marketplaces, and other third-party intermediaries such as customs brokers, fulfillment shippers, and express consignment carriers must take for monitoring, detecting, and preventing trafficking in counterfeit and pirated goods.

While the line between business and politics in China 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 that 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.