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Alibaba’s full rebuttal to the USTR for adding Taobao to the Notorious Markets list

By Chris Dawson January 15, 2018 - 10:45 am

Following the news that Alibaba’s Taobao marketplace has been added to the Office of the United States Trade Representative (USTR) ‘Notorious Markets’ list alongside recognised pirated content download sites, Alibaba have released a point by point rebuttal of the USTR assertions.

The main thrust of their argument is that they’ve done an absolute ton of work to increase trust in the site

SMEs

The USTR assert that SMEs find it difficult to get infringing products removed saying: “In 2017, more SMEs have requested assistance from US government agencies and embassies regarding Taobao.com than any other ecommerce platform”. Alibaba reply that not only are they the biggest marketplace in the world but that comparisons are unfair as the USTR does not ask for similar data from US companies (e.g. eBay and Amazon).

Alibaba also not that they have been working directly with the USTR at Alibaba’s Gateway 17 conference in Detroit for SMEs where the U.S. Patent and Trademark Office (USPTO) and they gave a presentation entitled, “Empowering Innovation with the USPTO.”. Over 3,000 US small businesses and entrepreneurs attended and learned about opportunities to generate sales and create jobs in the United States by tapping into China’s growing consumption economy many of whom are now successfully partnering with Taobao merchants to sell on Aliaba’s marketplaces.

To assist SMEs who allege rights infringements, Alibaba have made available an online form for rights holders to submit takedown requests even if the rights holder does not wish to register an account with Alibaba. A particular problem appears to be SMEs complaining to the US government but not necessarily notifying Alibaba of the issue.

Transparency

Alibaba say that they have been more transparent than any platform in the world regarding the presence of counterfeit products on their platforms. They have real-time scanning of suspicious product specifications during a merchant’s listing creation process enabling them to not only to take down listings after they have been posted but to scan any suspicious product specifications during the listing creation process, so that they can stop merchants from uploading infringing content.

Alibaba have also provided leads that resulted in over 1,000 arrests and the closure of nearly 1,000 offline manufacturing and distribution locations.

Implementation of 2016 USTR recommendations

Alibaba point to 3 key recommendations made by the USTR in 2016 – to simplify processes for right holders to register and request enforcement action, to make good faith takedown procedures generally available and to reduce Taobao’s timelines for takedowns and issuing penalties for counterfeit sellers. They set out the steps they have taken since them to address all of the USTR concerns and the results of these actions. This included that between September 2016 and August 2017, Taobao proactively took down 28 times more listings than the number of listings removed reactively in response to complaints from rights holders, and 98% of those proactive takedowns were removed before a single sale took place.

You can download the full rebuttal of the USTR decision to classify Taobao as a notorious marketplace here.

Tamebay view

Alibaba have two key disadvantages which have led to the USTR classification. They are the biggest marketplace in the world so as one would expect there is likely to be more instances of sellers attempting to list intellectual property rights infringing items on the site. In addition the USTR doesn’t even consider companies registered in the US so if SMEs complain about these platforms there aren’t even any metrics for comparison.

Alibaba have made huge strides in trust and safety in recent years, reported 1000s of sellers to the authorities and even on occasion taken out civil prosecutions (Alibaba aren’t law enforcement so can’t initiate criminal cases) against sellers of counterfeits.

There is a big difference between a site which sets out to make pirated content available for download or torrent streaming and a marketplace who working hard both domestically and internationally to remove infringing products. China does have a long standing reputation for counterfeits but even Chinese consumers are hungry for authentic products. Alibaba appear to be doing everything that they can to stamp out infringing items and prevent them from being listed on their marketplaces in the first place. Taking this into account their inclusion on the ‘Notorious Markets’ list seems harsh.

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