Alibaba is already having a rough time managing their business and reputation in the U.S. First affiliate Ant Financial’s proposed acquisition of MoneyGram collapsed due to objections from the U.S. government, now their giant marketplace Taobao has made its way (yet again) on the USTR (United States Trade Representative) naughty list.
Taobao, Alibaba’s hugely popular marketplace, is among 25 e-commerce sites to feature in the latest USTR ‘Notorious Markets’ list. The annual list roots out physical and digital marketplaces that are adjudged to be “engaging in and facilitating substantial copyright piracy and trademark counterfeiting.”
The USTR acknowledged that Alibaba has taken steps to improve the situation, but it noted that “important unresolved concerns remained.” In particular, the report said Alibaba hasn’t clearly articulated the scale of Taobao’s counterfeiting issue, instead choosing to present progress it has made. It was also criticized for prioritizing major brands over the concerns of SMEs.
The key concern of the report on Taobao is around how Alibaba works with IP holders to remove counterfeit listings and prevent sales of unlicensed goods.
“A high volume of infringing products reportedly continue to be offered for sale and sold on Taobao.com and stakeholders continue to report challenges and burdens associated with IP enforcement on the platform,” the report said of Taobao, which is a key service that helps Alibaba reach 488 million Chinese consumers each year.
Alibaba have responded with with a “point by point rebuttal” of the section of the report focused on Taobao. Furthermore, they issued a separate statement blaming politics as the reason behind Taobao’s inclusion on the list:
“As a result of the rise of trade protectionism, Alibaba has been turned into a scapegoat by the USTR to win points in a highly-politicized environment and their actions should be recognized for what they are. The USTR’s actions made it clear that the Notorious Markets List, which only targets non-US marketplaces, is not about intellectual property protection, but just another instrument to achieve the US Government’s geopolitical objective,” a spokesperson said by email.
Last year, Alibaba Chairman Jack Ma announced that he would invest one billion yuan in research institutes around the world, during the next three years alone. Specifically, the DAMO academies for research on artificial intelligence (AI), the Internet of Things (IoT), quantum computing and so on are scheduled to be set up in seven cities in China, the United States, Russia, Israel and Singapore.