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Alibaba spends $160.7 million tackling counterfeits

December 29, 2014

AlibabaChinese e-commerce company outlined the efforts it has made in tackling counterfeit products on its sites to enhance consumer protection.

In its 2014 Counterfeit Report Press Conference, Alibaba Group’s CEO Jonathan Lu spoke on how the company has sought to eliminate the sales of counterfeit electronics on its sites, spending $160.7 million (€131.8 million) on tackling counterfeits between the beginning of 2013 and November 2014 and employing over 2,0000 people to spearhead its anti-counterfeit efforts.

In addition, 200 people are expected to be added to the task force in 2015 and around 5,400 volunteers have been enlisted to “assist with daily online surveillance and selective inspection”. The company has also cooperated with Chinese law enforcement agencies regarding over 1,000 counterfeiting cases during 2014, resulting in the arrest of 400 suspects from 18 different counterfeiting rings and the closure of 200 stores, factories and warehouses involved in the production and selling of counterfeits.

Working with 1,137 brand owners to identify and remove IP-infringing goods from marketplaces, Alibaba has also signed MOUs with “major international associations” to protect IP rights, and helped to form an ‘Intellectual Property Protection Working Group’.

The company has also assisted in counterfeiting cases by passing on information and leads to the Shanghai police and by gathering clues with the Fujian Provincial Public Security Bureau to crack down on over 200 online stores selling counterfeit shoes and luxury goods, resulting in the arrest of 89 suspects and the seizure of $7.2 million (€5.9 million) worth of counterfeit goods.

A report by Alibaba found that 90 percent of all counterfeit goods were distributed from 10 regions in China; with the top three being the Pearl River Delta region, Yangtze River Delta region, and Southeast China.

As part of its efforts to tackle counterfeiting, Alibaba uses data mining technology to analyse and track transactions of IP-infringing products, as well as providing an online complaint platform for brand owners to report infringement and conducting random checks using third parties that purchase suspected counterfeit products.

In terms of penalties, Alababa stated that when it receives complaints or allegations regarding infringement or counterfeit goods, it gives the sellers of those products up to three days to refute the allegations and provide evidence of the products’ authenticity.

If the allegations are not refuted, Alibaba penalises the sellers by delisting their products, arranging for them to reimburse the buyer, limiting their ability to add listings for a certain period, and/or adopting a ‘name and shame’ policy. It also closes down storefronts and confiscates the consumer protection security deposits paid by sellers, with the seller also permanently banned from establishing another storefront on Alibaba marketplaces.

The Recycler reported recently that Alibaba has “made great strides” in removing counterfeit electronics from its sites, but that some companies want it to do more to tackle the issue.

Categories : Around the Industry

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