Alibaba

American Apparel and Footwear Association president and chief executive officer Rick Helfenbein had fierce words for Alibaba Wednesday.

Speaking at the American Chamber of Commerce in Hong Kong, Helfenbein called Alibaba’s response to the organization’s complaint over fakes the “stupidest defense I’ve ever heard a company make” and said the Chinese company “needs someone to call them to order.”

AAFA representatives have repeatedly lashed out at the e-commerce giant during speeches and public appearances.

“We have a saying in America since 2008: too big to fail,” Helfenbein said. “What is Alibaba? Too big to have control? That’s the stupidest defense I’ve ever heard a company make. We’re so big we can’t control ourselves. Oh yeah? Watch out. Because we’re not going to let this die. We’re not.”

Back in Washington, the AAFA and 17 organizations filed a new complaint with the U.S. Trade Representative’s office over counterfeits sold on Alibaba’s online platforms, urging the agency to step up its scrutiny of the Chinese e-commerce giant and relist it on a counterfeit watch list.

Alibaba defended itself against the criticism on Wednesday and outlined the steps it has taken and continues to take to work with rights holders and target counterfeits on its platforms.

The broad coalition of industry groups and the AFL-CIO has asked USTR to re-list Alibaba’s platforms on its “Notorious Markets” report.

“We are encouraging this step because of the enormous number of counterfeits that persist on Alibaba platforms, most notably Taobao, but also on other platforms such as AliExpress,” the groups wrote in a letter to Probir Mehta, assistant USTR for innovation and intellectual property.

“We take counterfeits very seriously because of the damage it causes our member companies, international workers and U.S. consumers. To date, Alibaba has not fixed this problem,” said Helfenbein. “Every day we read about Alibaba’s continued global expansion. While this is great for their shareholders, we are deeply concerned that they have not been as proactive on counterfeits as they could have been. They have not taken all the necessary steps to prevent, significantly reduce or totally eliminate the issues that have been raised.”

The organizations said Alibaba has failed to carry out the steps that USTR outlined in its 2015 report. That included simplifying Taobao’s processes for rights holders to register and request enforcement action, making Taobao’s “good faith” takedown procedures more available, and reducing Taobao’s timelines for take-downs and imposing penalties on counterfeit sellers.

USTR removed Alibaba from its “Notorious Markets” list in 2012, but brands said they continued to see the widespread sale of counterfeits on its platforms. The agency issued a strong warning to the company in a pair of reports last year, essentially putting it on notice to immediately address rights-holders’ concerns.

“During the 10 months since USTR published this report, Alibaba has made a number of statements acknowledging its counterfeit problem and public commitments indicating that it will improve the way it runs its platforms to address that problem,” the organizations said in their complaint. “Alibaba has also made a number of high-profile hires and is reportedly spending more resources to tackle this problem and explain its effects in Washington and around the world. While this increased attention is a welcome development, we have seen little evidence that there has been any noticeable change on the Alibaba platforms themselves.”

An Alibaba spokeswoman said in an e-mailed response Wednesday that the associations’ criticisms outlined in the letter “are vague, not fact-based and fail to recognize the tremendous progress that has been made to date and will continue to be made on anticounterfeit efforts as outlined in our USTR submissions.”

The Internet giant submitted more than 60 pages outlining what it said are not only the new programs targeting counterfeits today, but also its future plans working with brands in two separate filings to USTR, which is taking public comment for its Notorious Markets report set to be released by the end of the year.

“Alibaba’s marketplaces employ ever-more-rigorous, user-friendly and state-of-the art systems to deal with sales of potentially infringing items,” she added. “Over the past year, more rights holders are successfully participating in our programs, more brands have joined our platforms and are working with us on our anticounterfeit efforts, and more counterfeit products are being taken down and proactively blocked from ever making it to our marketplaces.”

The company said the number of registered brands participating in takedowns is up 70 percent year-over-year, while the number of takedowns has doubled as a result of rights-holder submissions and the number of preventative measures has “dramatically increased.”

The company said it takes down or prevents 25 counterfeit listings for every notice that rights holders submit.

The “Notorious Market” report highlights by name online and physical marketplaces that “reportedly engage in and facilitate substantial copyright piracy and trademark counterfeiting.”

The list does not represent findings of legal violations or reflect an analysis by the U.S. government of general intellectual property protections or enforcement activities in a country. Instead, the study is aimed at prodding foreign governments to address intellectual property allegations raised, intensify efforts to combat piracy and counterfeiting and pursue legal actions where warranted.

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