Founder and CEO of Alibaba-Jack Ma have defended himself in the position that he is an enthusiastic fighter of counterfeits and has repeatedly charged Beijing to take a tight line towards fakes, even going as far as to recommend throwing forgers in jail. However, if Ma’s advice were to be followed, he would also be on his way to the pits. As Alibaba has once again been ranked by the Office of the United States Trade Representatives as a “Notorious Market,” a label for the world’s biggest violators of IP, trademark, and copyright law, sitting on the list right next to thepiratebay.org.
Craig Crosby of The Counterfeit Report –a consumer advocacy firm that is spearheading the fight in the USA against counterfeits — believes that Alibaba’s “notorious” title is well deserved and jested at the suitability of Jack Ma’s company being designated after the fable “Ali Baba and the 40 Thieves.”
“The counterfeits remain, consumers are deceived, and manufacturers and retailers are being harmed in a big way with little aid,” Crosby penned about Alibaba in a recent press release, claiming that the platform, “facilitate[s] and enable[s] circulation of counterfeits throughout the world. In fact, it’s Alibaba who can’t knock off the knockoffs, and enforcement action should be aimed at Ma.”
Alibaba boasted in 2016 that it took down 380 million products and closed 180,000 stores on Taobao.com for selling counterfeits and in 2017 the number of terminated stores rose to 240,0001.
“Alibaba indicates 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 report is not true,” Crosby wrote. “Alibaba’s “AliProtect” counterfeit enforcement program presents a gauntlet of obstacles, obscure conflicting instructions, and ridiculous responses to rights holder’s notifications.”
Crosby goes even further, alleging that he was refused refunds for test purchases of validated counterfeit products and declared that Alibaba “doesn’t even have telephone customer or intellectual property violation support Calls to U.S. Corporate Headquarters … go unanswered, are disconnected, or direct that a message should be left. Alibaba emails that demand information or documents states that “Please do not reply to this email/message. This mailbox is not watched, and you will not get a response” and users are then directed to an Alibaba web-form that won’t affirm document files.”
Crosby can confidently back up his bold statements with direct experience, as his firm has identified and extracted over 18 million infringing items on Alibaba’s websites on behalf of rights holders. He addresses counterfeits as a law enforcement agent would, processing, cataloging, and archiving them to be employed in court.
“Every item we purchase is bagged and tagged as evidence, every transaction is captured, every screenshot is captured,” Crosby explained to me in an interview. “Just a monumental accomplishment to support the allegations that are in the press releases.”
While Jack Ma insists that the sellers of counterfeits should be jailed, he continues to directly profit off of them. In March of 2017, he wrote a statement to China’s parliamentary delegates which stated that “The majority of counterfeiters are not held legally responsible for their actions.” This is something that Ma should know better than anyone else.
According to an OECD report, over 60% of the world’s knockoffs originate from China, and in 2015 the Beijing-mouthpiece Xinhua news agency reported that 40% of China’s domestic e-commerce sites were made up of counterfeit goods.
However, the counterfeit problem is not reserved to China, as Chinese-made counterfeits are finding their ways onto American e-commerce platforms en masse. According to Payoneer, 62% of China’s online vendors are now on Amazon, with 91% of them selling to the United States. According to research by Marketplace Pulse, Chinese sellers now makeup 25% of the merchants selling on Amazon USA and potentially a quarter of Amazon’s global marketplace.
Counterfeits have become one of the biggest economic issues of this era. By 2022, the value of counterfeit and pirated goods is predicted to grow to $2.8 trillion and cost 5.4 million jobs. Meanwhile, the reputations of legitimate brands are being destroyed, and consumer confidence in e-commerce is becoming tarnished. The legal systems of most countries are just not equipped to deal with cross-border e-commerce, as the violators of their IP, trademark, and copyright laws remain outside their jurisdiction, and the e-commerce platforms where these goods are sold cannot yet be held legally accountable. For the unscrupulous, the cross-border counterfeit loophole is an incredibly easy and relatively safe way to make massive amounts of money.
However, if the Office of the United States Trade Representative finds Alibaba to be a “Notorious Market,” they may want to take a look in their backyard. If they were to do so, they’d more than likely find a certain company run by the current richest man in the world who is perhaps one of the most blatant traffickers of counterfeit goods that have ever been known, where massive quantities of Alibaba fakes end up being directly sold and drop-shipped with impunity.