Alibaba Group Holding Ltd. has pledged to pursue efforts to fight piracy after a clothing trade group in the United States accused the e-commerce giant of allowing the sale of counterfeit goods on its online shopping platform Taobao.
The American Apparel and Footwear Association asked the Office of the US Trade Representative and the Securities and Exchange Commission to add Alibaba’s Taobao to the Notorious Market list, an official report that identifies internet marketplaces dealing in fake and pirated goods, China Daily reported.
The USTR removed Alibaba from the blacklist in 2012, but AAFA wants Taobao to be put back on this year’s list to put pressure on the company to take more effective measures to prevent the sale of pirated goods on its websites, the newspaper said.
Reacting to the accusations, Alibaba said it has pursued efforts to stop illegal activities on its e-commerce platforms in cooperation quality watchdogs and brand owners.
“Alibaba Group is dedicated to the fight against counterfeit goods because the health and integrity of our marketplaces depend on consumer trust,” a spokeswoman said.
She said the company has conducted random checks, used data-mining technology and offered an online complaint forum as part of efforts to stop unscrupulous merchants from using its websites to sell illegal goods.
The latest accusations against Alibaba could dampen investor sentiment on the stock, analysts said.
“This incident certainly has the potential to negatively affect Alibaba’s share price in the short term, because these will be the same firms that directly sell to Chinese consumers through Alibaba’s Tmall,” the report quoted Neil Flynn, portfolio manager at Alcuin Asset Management, as saying.
The AAFA, which represents more than 1,000 brands in the US, said the sale of counterfeit products on Taobao has resulted in millions of dollars of lost sales, reputational damage, legal costs and “exhaustion of internal resources” in the US apparel and footwear industry, according to local media reports.
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