US blacklists Alibaba as ‘Notorious Markets’ for selling counterfeit goods

Market - Himanshu Gill - Dec 22,2016

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us blacklists alibaba as notorious markets for selling counterfeit goods

The US government has again blacklisted China’s e-commerce giant Alibaba as “notorious markets” for selling fake or counterfeit products.

Alibaba was taken off this list four years ago in 2012, but the United States Trade Representatives (USTR) again targeted the company saying that its online platform Taobao is being used to sell high number of fake goods. USTR identifies companies known for the sale of counterfeit products and for violations of intellectual property rights and on these basis had blacklisted Taobao in 2011. At that time, Alibaba had addressed the concerns of intellectual property rights holders and committed to cut the number of pirated and counterfeit goods on its website.

This time, the company has rejected the allegations, insisting it regulates its market place better than in the past. The firm also suggested that the current political climate after elections in the US might be the reason of they are back on the list. US President elect Donald Trump had repeatedly accused Chinese firms of stealing intellectual property.

USTR has blacklisted 20 other websites in this year’s Notorious Markets list, saying that they had received large number of complaint reports from right holders in the US.

Michael Evans, Alibaba Group President in the US, said that the company is disappointed with the decision as they had tightened controls on its sale of all sorts of goods, requiring sellers to show proof of authenticity.

More than 250 members, including the elites like Gucci America and Michael Kors, have threatened to leave the IACC in protest of Alibaba's membership. Alibaba, by far China's biggest online retailer, floated on the New York Stock Exchange in September 2014 and broke records by raising $25bn.

This Inclusion in the blacklist does not carry any direct penalty but will hurt Alibaba's credibility. Alibaba shares fell by 0.7 percent on the New York Stock Exchange to close at $89.25 on Wednesday.