Alibaba.com, the massively successful internet retailer that made Chinese billionaire Jack Ma rich enough to buy such frivolities as the ailing South China Morning Post as a present for Beijing authorities, remains just a step away from again landing on the US Trade Representative’s 2015 “Review of Notorious Markets” blacklist for not being stringent enough in keeping counterfeit and pirated goods off its markets.
In its 30-page report, published this month, the trade office said it is increasingly concerned about intellectual property infringement about Alibaba.com, the business-to-business website, and Taobao Marketplace, both of which made the piracy blacklist in 2008. Alibaba was removed in 2011, followed by Taobao in 2012 after both promised they would work with legitimate sellers to clean up the sites.
Internet marketing in China – dominated by Alibaba – has taken off beyond the wildest dreams of its owner, although there seems to be plenty of room for the 40 thieves, the tale from the Arabian Nights from which Ma took the name of his gold pile.
On Nov. 11, for instance, Chinese shoppers spent nearly US$8 billion in 10 hours on Alibaba’s “Singles Day,” the Internet shopping day that Ma invented to mimic the US’s Cyber Monday. By comparison, five days of shopping in the US between Thanksgiving on Nov. 26 and Dec. 1 – Cyber Monday – sales were US$5.56 billion, according to the analytics firm comScore.
How much landing on the Notorious Markets list would cost Alibaba is uncertain, since it draws by far the largest percentage of its online customers from China’s 668 million Internet users – an online population twice the size of the entire 320 million of the United States. But its market capitalization has fallen by US$50 billion in 2015 on the threat of being blacklisted.
Ma and other Alibaba officials said they are determined to cooperate with US.authorities. On Dec. 21, the internet giant announced it had hired Matthew Bassiur, a former counterfeit investigator for Apple, as its head of global intellectual property enforcement, leading a team to work with regulators, law enforcement and retail partners in the attempt to block counterfeiters.
But with 9 million businesses online, policing them in a country that supplies some 70 percent of the world’s counterfeit consumer goods is enormously difficult. Ma himself says the problem is one of deep concern as an impediment to his being taken seriously by western consumers.
During the 2013 Notorious Markets review, according to the US Trade Office report, “Taobao provided assurances that it would continue to work with all relevant stakeholders to address remaining issues raised by software, publishing, and apparel and footwear companies, many of which are small and medium-sized enterprises with limited enforcement resources.”
In 2014, Alibaba Group, which comprises eight companies, told the USTR that the company had removed millions of listings for counterfeit and pirated products manufactured in China that were offered for sale and export both on its own and pursuant to the notice and takedown process.
In January 2015, Alibaba and Taobao caught the attention of the State Administration for Industry and Commerce, which issued a White Paper in which it identified the website as a target in three of the top 10 cases named by the National Copyright Administration of China in its 2014 “Sword Net Action Campaign.”