Alibaba (NYSE:BABA) Cracking Down On Counterfeits

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The mega e-commerce business from China, Alibaba (NYSE:BABA), has often been charged for selling pirated goods online. Alibaba is one of the biggest online marketplaces in the world along with Amazon and eBay.

Many trade associations have often complained that the business doesn’t do enough to fight counterfeits. Rick Helfenbein from the American Apparel and Footwear Association has said, “They are the bad boys of retail right now, and we need to clean that up”. Alibaba has been repeatedly asked to clean up the marketplace.

As many as 15 trade groups have asked policymakers in Washington to place Alibaba in the “notorious markets list”.

Alibaba Is Full Of Fakes

According to the complaint, there are thousands of counterfeit handbags, toys, shoes, clothes, travel goods, furniture, watches, auto parts, jewelry, pharmaceuticals, electronics and other products at any time on the Alibaba store.

Regulators in China too have in the past criticized the business for being too lax in cracking down on pirated goods. The Chinese State Administration for Industry & Commerce, in fact, came out with a report last year where it was mentioned that only one in three products on sale at the store were genuine.

Alibaba denies these charges, though, saying we are doing all we can. But the associations say there has been no noticeable change.

Alibaba Shoots a Letter to the US

Alibaba (NYSE:BABA) has now written a letter to the United States government, where it mentions that they have taken “steadfast efforts” to make the website free of counterfeits. Alibaba wrote this letter responding to complaints received from the trade groups. The company has also submitted the things it is doing to the United States Trade Representative.

“We routinely collaborate with brands, associations, and regulators to maintain the integrity of our marketplaces”, the letter read. It further said, “We have a strong commitment for maintaining intellectual property rights”.

It’s time the business took such action because Alibaba is increasingly looking overseas to bring in international revenues. They want to win the trust of international brands to expand outside China.

Amazon (NASDAQ:AMZN)  too was in trouble recently when Apple Inc. pointed out that as much as 90 percent of their battery chargers on sale at the online store were fakes. Apple has even filed a lawsuit against a supplier based out of New York. Amazon though has not been made a party in this legal suit.