Notorious Markets report calls out Alibaba on counterfeit affiliations

The U.S. government is taking a stand against counterfeits. In a release by the American Apparel & Footwear Association, it was made clear that the U.S. government had sent a “strong warning” to Alibaba to clean up its act on counterfeits.

The American Apparel & Footwear Association (AAFA) has been upset about this issue for a while. “AAFA strongly complained about the volume of counterfeits on the Alibaba sites and has repeated called for Alibaba to come up with a new system to take [them down],” said Juanita Duggan, president and chief executive officer of AAFA. However, not much on the websites has changed. After not seeing the expected results, the U.S. government decided to step in.

The United States Trade Representative (USTR) released the Notorious Markets report citing some of the strongest criticisms about Alibaba. The report highlights physical and online marketplaces that sell or partake in selling counterfeit products. The report cited multiple instances in which Alibaba was involved in these acts. Alibaba received the most attention in the report in comparison to any other market.

Alibaba receives negative attention from Notorious Markets report

The report stands to help resolve the issue that Alibaba refused to fix. “After years of trying to work with Alibaba, we got nowhere,” said Duggan. Earlier this year in July, Duggan stated that AAFA attempted to contact Jack Ma, executive chairman of Alibaba, to work out these issues. However, Alibaba gave no response. This issue has been address for years and raises a real issue for U.S. regulators such as USTR and the Securities and Exchange Commission, which regulated publicly traded companies such as Alibaba.

The report is truly meant to inflict change on the subject of counterfeiting on the sites. “We hope Alibaba responds to this report and uses its position as one of the largest technology companies in the world to lead the way and eradicate counterfeits form its sites,” said Duggan. In the fashion industry, authenticity is imperative. The idea that one of the largest public trading companies doesn’t abide by counterfeit laws brings much bigger issues into question. With such high standing, it’s questionable why Alibaba hasn’t thought to remedy the situation sooner.

The Notorious Markets report this year identified 101 physical and online markets for 2015. The report sheds light on the seriousness of the counterfeiting issue. USTR’s review helped to motivate the report and also highlight Alibaba as one of the more troubling companies. Ultimately, the report is mean to serve as of a call-to-action, than a negative review. “We hope Alibaba chooses to become a market of integrity,” said Duggan.

Photo: Carlos Barria / Reuters