WASHINGTON — Alibaba’s out.
The International Anticounterfeiting Coalition, under intense pressure from a contingent of its brand members, said Friday it has suspended the membership of Alibaba Group as well as that of two other members.
The IACC, which had reportedly lost three major brands in the past two weeks, including Michael Kors, Gucci and Tiffany & Co., took the action in the face of a threatened mass defection over charges of continued counterfeiting on Alibaba’s Taobao platform.
“In consideration of some of the concerns raised by our membership, Bob [Barchiesi, president of IACC] has recommended and the board has agreed, to suspend the recently announced general membership category to allow further discussion and consideration,” the IACC board members wrote in a letter to its members. “This will result in the suspension of the memberships of Alibaba, Wish.com and The Real Real at this time.”
The board further stated that the move would not affect its existing relationship or joint initiatives with Alibaba and the two other companies.
“We continue to stand by our inclusive approach to working with intermediaries,” the board added.
Jennifer Kuperman, head of international corporate affairs at Alibaba Group, said Friday: “The only way to solve the complex, industrywide issue of counterfeiting is through strong industry collaboration, and we believe that intermediaries, like Alibaba, must be an integral part of the solution.
“Whether or not we are a member of the IACC, we will continue our productive and results-oriented relationships with brands, governments and all industry partners,” Kuperman added. “We will continue our work to implement the IACC MarketSafe Expansion Program, which expedites the takedown procedure, shifting the burden away from brands that are no longer required to provide evidence for each submission. The program will be available to all brands, large and small, at no cost.”
The suspensions come on the heels of an anonymous letter sent by a group of brand members to IACC’s board, calling into question the decision to include Alibaba in the organization. The brand members said they represented a majority of IACC’s membership and threatened to pull out if Alibaba remained a general member.
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 Apple, Chanel, Coach, Hugo Boss, L’Oréal and Nike, among many others.
IACC created the “general member” category in 2015, a category that Alibaba fell under. The association said in a previous statement that the category was created “in recognition of the integral role that intermediaries play as part of the solution and in eBay’s and others’ interest in joining.”
IACC also said Alibaba’s application for membership was unanimously approved by its board of directors.
The brand members behind the anonymous letter also called on the IACC board to address a long list of concerns, including ties between Barchiesi and Matthew Bassiur, vice president and head of global intellectual property enforcement at Alibaba.
In its letter Friday, the IACC board addressed some of the allegations about Barchiesi’s financial transactions and conflict of interest disclosures, a portion of which were not shared with the board.
“Certain aspects of the disclosed conflict [of interest form] were not communicated to the board because of a weakness in our corporate governance procedures,” the board stated. “This failure to disclose was not attributable to inaction on Bob’s part. We believe that Bob’s performance and accomplishments as president have been exemplary and he has the board’s full confidence and support.”
The board further stated it is hiring an independent firm to “review, develop and recommend the implementation of corporate governance measures, Internet controls, policies, procedures and bylaws to ensure that they meet the highest standards and fit the current size and scope of our organization.”
The IACC board said it continues to support Barchiesi as president, noting that it is “extremely proud of what the IACC has accomplished over the last eight years under Bob’s leadership.”
“During this time the organization’s membership has nearly doubled, and our programs have expanded internationally.”
The IAAC’s spring conference is being held May 18 to May 20 in Orlando, Fla. Jack Ma, Alibaba’s founder and executive chairman, has been tapped as the keynote speaker.
Marcia Horowitz, senior executive president of Rubenstein, which handles public relations for the IACC, said: “As far as the IACC knows Jack Ma is still speaking at their conference and the MarketSafe program continues.
“They are happy to welcome back members but that was not the impetus behind doing this,” she added in response to a query.