Alibaba

WASHINGTON — The International Anticounterfeiting Coalition is said to be facing the threat of an exodus of a majority of its brand members over Alibaba Group having joined, according to an anonymous e-mail letter that has come to light.

The IACC has reportedly lost two major brands in the past two weeks — Michael Kors and Gucci — in protest over Alibaba’s membership and now Tiffany & Co. has reportedly withdrawn its membership as well.

Alibaba joined the nonprofit in April. Members include hundreds of companies across a variety of sectors, from luxury goods to electronics as well as law firms and related service providers aimed at mitigating counterfeit goods. Current member brands include Chanel, Coach, Hugo Boss, L’Oréal, Nike and Apple, among others.

Alibaba has been criticized for allowing illegal counterfeit products to be sold on its Taobao platform. The e-commerce giant hit back at some of the criticism being leveled against it on Thursday.

A new twist in the growing controversy has come from the anonymous letter sent to IACC’s board members and obtained by WWD, calling into question the decision to include Alibaba in the organization.

“We are writing to you as a concerned segment of brand owner members because we have not heard from one single brand that believes this was a positive or proper decision in any way,” the letter stated.

“Did any of you speak with the leadership within your company to see how they felt about this decision?” the letter went on. “Did any of you speak with your coworkers within your company that are fighting the fakes on Alibaba every single day? We are not aware of any such conversations so we now ask that you come to us and discuss these details so we can have a better understanding on how exactly it has come to this.”

The “brand members” behind the letter called on the IACC board to address a long list of concerns.

“While we hate to address these topics anonymously, your board is made up of our fellow brand owners so you and they should completely understand our need to blow the whistle in this manner,” they stated in the letter. “…You are hearing the majority speak right now and the majority will not continue on as IACC members if you continue to allow membership to Alibaba.”

Alibaba, which declined to directly address the specific allegations in the letter, nonetheless hit back in a new statement on Thursday.

“We are committed to working with brands and industry associations through cooperation rather than resorting to unproductive tactics,” an Alibaba spokeswoman said in an e-mailed statement. “Every day, world-class brands are doing business on the Alibaba platform. We are part of the solution. However, those that have a financial interest in IP litigation would rather pit the brands against Alibaba, using public relations tactics that are not in the interest of anyone except themselves.”

She went on to say that Alibaba applauds the “IACC’s approach to include market intermediaries in the fight against counterfeits.”

“Alibaba is committed to fighting the production and sale of counterfeits, and we have a track record of providing constructive solutions,” the Alibaba spokeswoman added.

The IACC board issued a statement in response to the letter. “The IACC has experienced a period of rapid growth and is now the premiere anticounterfeiting organization,” it said. “We take the allegations in the recent communication seriously and will undertake an independent review of them. At the same time, we will use this as an opportunity to review all of our policies and procedures to confirm that they meet the highest standards and that our corporate governance fits the size and scope of the IACC we have become.”

On Wednesday, Alibaba said its IACC MarketSafe Program, an initiative it started in 2013, is being expanded so that more brands can participate.

“The new Marketsafe Expansion program that we just announced, which is an extension of the Marketsafe program that we developed with IACC in 2013, enables participating brands to work with Alibaba to take down suspect listings at no cost with a more streamlined, expedited procedure,” the spokeswoman said.

The e-commerce giant said it will no longer charge companies a fee for the program and brands will no longer be required to provide evidence to support intellectual-property infringement complaints.

Since the MarketSafe program’s launch, nearly 5,000 sellers’ storefronts have been closed on Alibaba’s marketplaces, while more than 180,000 infringing product listings have been removed, Alibaba said.

But the controversy over Alibaba’s membership in IACC is looming over new initiatives as well as a conference slated for next week.

The IAAC’s spring conference is being held May 18 to May 20 in Orlando. Jack Ma, Alibaba’s founder and executive chairman, has been tapped as the keynote speaker — a point that did not go unnoticed by the anonymous letter.

“We ask that the board addresses each and every one of these topics with us prior to or during the IACC conference in an open forum,” the letter stated. “Rather than have Jack Ma speak to an empty room next Thursday you should consider that as the perfect time for a town hall discussion with all of us very concerned brand owner members. Let’s take a vote while we are all in the same room together.”

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