The Office of the United States Trade Representative made a definitive move this week to publicly shame Alibaba, the world’s largest e-commerce company, for not doing enough to curb the sale of counterfeit goods on Taobao, an online shopping platform and app it owns and operates. The U.S.T.R. added Alibaba back to its 2016 list of “Notorious Markets” known to host fakes after removing it in 2012, noting that it was “an important concern due to the large volume of allegedly counterfeit and pirated goods available,” which it called “unacceptably high.”
As reported in the Complex News documentary “Fake! Inside the Trillion-Dollar Bootleg Industry,” counterfeit items affect fashion brands’ income and discredit the original work of creatives, but have also been proven to fund terrorism, organized crime, and sex trafficking, and to utilize child labor. One of the most recent examples of this link came to light in the 2015 Charlie Hebdo attacks in France; the U.S. Department of Homeland Security confirmed to Complex that one of the attacker’s weapons cache was funded by selling fake designer goods on the streets of Paris.
Taobao is one of the top 15 most popular websites in the world, the U.S.T.R. report states, and ranks in the top five in China. In interviews for the Complex documentary, experts pointed to Alibaba, and Taobao specifically, as a problem area in the fight against fakes. “The shopping website TaoBao provides a huge market for fake products,” says Li Qiang, founder and executive director of China Labor Watch. He explained that fakes for sale on the platform extend beyond just clothing and accessories, a statement corroborated by Craig Crosby, founder of The Counterfeit Report, who told Complex about purchasing fake memory cards on the site.
“Every [memory card] that we've purchased—on eBay, Alibaba, and Amazon—we've never received an authentic one, and I have thousands of them,” Crosby claims.
Taobao’s return to the Notorious Markets list carries no actual sanctions or penalties, but serves as a warning for shoppers to beware. That's especially tough news to take for Alibaba, as they look to expand outside of China. In June, after receiving increased criticism over Alibaba’s stance on fakes, CEO Jack Ma penned an op-ed on the topic for The Wall Street Journal. “Counterfeit goods are absolutely unacceptable,” he wrote. “We have zero tolerance for those who rip off other people’s intellectual property.”
Alibaba Group president Michael Evans was quoted in The New York Times as saying that the company is “very disappointed” to be back on the list. “We question whether the U.S.T.R. acted based on the actual facts or was influenced by the current political climate,” the paper reports him as saying, adding his claim that the company has removed over twice the number of listings of fakes this year that they did in 2015.