Chinese authorities have accused Alibaba Group of failing to crack down on shady merchants and counterfeit goods and allowing illegal deals on its e-commerce platforms.
The State Administration for Industry and Commerce (SAIC) said on Wednesday that many products sold on Alibaba’s e-commerce websites and services infringed upon trademarks, were substandard or fake, were banned or endangered public security, Reuters reported.
“Alibaba Group has long paid insufficient attention to the illegal business activities on Alibaba platforms,” SAIC was quoted as saying in a report published on its website.
The e-commerce giant “let that abscess fester until it became a danger,” it said.
“Alibaba not only faces the biggest credibility crisis since its establishment, it also casts a bad influence for other Internet operators trying to operate legally,” the government agency said.
The regulator’s scathing tone is unusual for a country that champions its largest home-grown corporations and actively encourages their global expansion ambitions, Reuters noted.
Following the criticism from SAIC, Alibaba’s shares slumped more than 3 percent in New York trading Wednesday.
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