Alibaba Combats Counterfeit Goods After Filing IPO Prospectus

As part of its effort to streamline the process of addressing counterfeit goods, Chinese e-commerce company Alibaba Group has begun to automatically remove from its biggest shopping site products that certain brands have deemed as fake. Alibaba’s Taobao shopping site is one of the busiest in the world, and counterfeit goods have been a concern ahead of the company’s IPO. Its expedited take-down process will initially apply to products identified by less than two dozen brands participating in the program.

The process “is similar to methods used by sites such as eBay Inc., according to the International AntiCounterfeiting Coalition, which negotiated the agreement with Taobao,” reports The Wall Street Journal. “It involves a list of companies whose complaints Taobao will process without the lengthy investigation normally required, the coalition said.”

The program costs $9,900 per year to participate, and is open to all 114 of the coalition’s brand owners. The program is expected to significantly reduce the amount of time it takes Alibaba to detect a counterfeit listing.

“Alibaba says it spends more than $16.1 million a year combating counterfeits on its marketplaces,” notes WSJ. “The biggest problem has been on Taobao, a massive site where anyone with a Chinese identification card can set up shop. Taobao’s recent strides in fighting fakes — last year it removed more than 100 million listings suspected of intellectual-property infringement — led the U.S. Trade Representative to remove the marketplace from its list of ‘notorious markets’ for counterfeit goods in 2012.”

While some brand-protection experts are reportedly encouraged by the company’s efforts, other trade groups say more needs to be done.

“Counterfeit goods have long been a thorny issue for Alibaba, which by some measures is the world’s biggest e-commerce company, with traffic on its Chinese shopping sites exceeding that of Amazon.com Inc. and eBay combined last year,” explains the article.