Alibaba vows to keep fighting fakes despite IACC snub

Haze Fan | Special to CNBC
Anti-counterfeiting group suspends Alibaba
Anti-counterfeiting group suspends Alibaba

Alibaba has vowed to continue cooperating with global brands on stamping out fake products, despite being turfed out of the International Anti-Counterfeiting Coalition's (IACC) just weeks after joining.

The U.S.-based IACC announced on Friday that it would suspend Alibaba's membership, after several IACC member companies - including Michael Kors, Gucci America and Tiffany - quit the group in protest at Alibaba's inclusion.

On April 13, Alibaba had become the first internet retailer to join the group under a new membership category designed for intermediaries

But IACC members accused the Chinese e-commerce giant of profiting by allowing fake goods to be sold on its platforms, with the Wall Street Journal (WSJ) citing a letter of protest from Michael Kors' general counsel Lee Sporn to the IACC in which he wrote that allowing Alibaba into the IACC provided "cover to our most dangerous and damaging adversary."

Alibaba said on Sunday that the IACC's decision to suspend its membership "will not affect the existing relationship nor the projects that both sides are working on together."

"We believe that Alibaba, as the world's largest e-commerce platform, plays an important role in tackling and solving counterfeiting issues across the globe," Alibaba said in a statement to China National Radio. "Alibaba will discuss and communicate more thoroughly with more brands in order to push forward the course of international anti-counterfeiting," it added.

According to the IACC website, Alibaba founder and executive chairman Jack Ma is due to speak at its Spring Conference, due to run from May 18-20.

Chinese media, however, did not treat the ousting with the same aplomb, calling it "embarrassing" and "shameful", and describing the e-commerce giant as having been "brutally swept out the door" and "slapped round the face."

On social media, the news Aliababa had been dropped by the IACC went viral. Some patriotic netizens took the exclusion personally, with one called such as Eastern Bear saying, "This is not only a shame of Alibaba, it is a shame of this country."

But most posters supported the IACC's position and recalled their own experiences of being sold fake products on the Alibaba's Taobao platform, and even on Tmall - Alibaba's higher-end and supposedly safer marketplace on which many international brands operate virtual stores.

"Alibaba isn't innocent, there's no injustice here," said a Weibo user called Zhhtyq. Another user named Happy Heaven Earth and Ocean said, "Alibaba should not have become a public platform for selling fakes. Now that fakes are found on Taobao, Alibaba should take responsibility and the punishment."

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Before its suspension from IACC, Alibaba announced a new measure to crack down on fake products on Taobao, its largest sales platform - it said it would "re-regulate" stores that sold luxury brand products by requiring them to provide specific proof, such as invoices and letters of authorization from the brand, that the goods were legitimate.

Taobao would independently verify this evidence and only then grant stores the right to sell, Alibaba said, while non-compliant sellers would face punishments including forced product removals and even store closures.

Alibaba founder and executive chairman Jack Ma has previously admitted that the sale of counterfeit goods on the company's platforms was a huge problem, but denied that the issue was specific to Alibaba. "Today it's easy to perish Alibaba but difficult to eliminate the counterfeits...Anti-counterfeiting is not just a course of Alibaba, but it's the course for the whole China," he said during a speech to staff at his company's headquarters in March.

At the time, he called on staff to join him in fighting a crusade against fakes.

"It's time now to let the internet companies take the lead on the course, using the Internet methods, and big-data technologies to solve the problem...We must shoulder this responsibility," he vowed.

According to the April 28 report by the WSJ, brands are as yet unconvinced by Alibaba's stance. According to the WSJ report of his letter, Michael Kors' lawyer Lee Sporn claimed that Alibaba had a strategy of paying "lip service to supporting brand enforcement efforts, while doing as little as possible to impede the massive flow of counterfeit merchandise on its platforms."

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