WASHINGTON — The U.S. Trade Representative’s office has joined the outcry against Alibaba and counterfeits.
This story first appeared in the April 16, 2015 issue of WWD. Subscribe Today.
At an American Apparel & Footwear Association conference here Wednesday, the USTR took a firmer stance against Alibaba’s Taobao online marketplace — a week after the AAFA filed a complaint urging more government scrutiny of counterfeit sales on the Chinese Internet giant’s platforms.
“As recently as the fall of last year, it looked like there was a good momentum for your association, Taobao and your members to improve on that site’s takedown procedures,” Deputy U.S. Trade Representative Robert Holleyman told AAFA members. “So of course, like you, we were also disappointed to see efforts by Taobao that have essentially reversed course on that issue.”
AAFA filed complaints with the USTR and the U.S. Securities and Exchange Commission last week that claimed counterfeiting is worsening on Taobao and called for immediate action.
Juanita Duggan, president and chief executive officer of the AAFA, said her members have had “mixed success” in securing “takedowns” of a small percentage of infringing, counterfeit products being sold on Taobao. She also noted that many companies are frustrated at the “slow and cumbersome procedures that prevent swift action.”
In addition, she said counterfeiting has worsened on Taobao since the USTR removed the site from its “Notorious Markets” list in 2012 and declined to re-list the site in its 2013 and 2014 reports. AAFA held talks with Alibaba for the past year to address concerns, but Duggan said implementation of new commitments made by Alibaba had been “sluggish and nonexistent,” prompting the group to file the two complaints.
Alibaba responded to AAFA’s complaints last week, outlining in detail several measures it said it has taken to prevent counterfeiting and pirated goods from being sold on its marketplaces. The company also reiterated its commitment to continue the dialogue with AAFA and fight against counterfeits.
At the conference Wednesday, Holleyman went beyond an e-mailed statement the USTR sent in response to the complaints last week and appeared to be sending a direct message to Taobao.
“We believe, of course, that it’s in Taobao’s continued interest, as well as other online providers, to engage with authorities both in this country and in China to find effective ways of dealing with counterfeit products that may be sold by their sites,” Holleyman said. “They are not the only ones where we face problems like this, but they are a large site.” She added that it is important to use tools like the Notorious Markets report.
“We look forward to working with you to finding a solution to this problem and ensuring in all our IP negotiations with China that we highlight the shared interests in ensuring legitimate online and commercial marketplaces and shared problems that counterfeiting and piracy raise,” he told the conference.
Holleyman told AAFA members that the USTR is in the process of finalizing its “Special 301” report, which is another intellectual property rights study the U.S. compiles to monitor efforts, progress and problems with trading partners. China remained on the “Priority Watch List” in the 2014 Special 301 report released last April and it has been listed in the report every year since its inception in 1989.
“I can’t comment more specifically on the actions that we will be taking except that we have heard your voice, we have heard the concerns of your companies and your members, and they are ones that we take very seriously,” he added. “As your association has talked to us about this issue, we are looking forward to working with you around finding a solution to problems that you have identified like those around takedown procedures that have been unclear, difficult to use or slow.”