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Companies File Fakes, Claim Alibaba

The Consumerist reports that five months ago, designer brands complained that Alibaba wasn’t doing enough to rid its site counterfeiters. Now, the e-commerce megasite claims that it’s being victimized by fakes — not bogus products, but allegedly false complaints about vendors selling counterfeit products.

Alibaba, in a blog post on Thursday, accused the companies of abusing its intellectual property rights reporting system when they filed reports on behalf of several global brands.

Alibaba contends that these agencies are making false allegations and providing forged documents. It also accuses them of “trademark squatting” to have products removed.

Alibaba, which called for a boycott of the IP agencies, says the companies are often hired by brands based on the promise it could help merchants and brands in managing their intellectual property rights.

The e-commerce platform notes that many of these firms operate legitimately. However, it accuses Hangzhou Wangwei Technology Ltd., and other unnamed companies, of purposefully filing false complaints to the detriment of other businesses.

In all, the allegedly malicious reports accounted for 24% of all complaints processed by the Alibaba’s Intellectual Property Protection Platform.

The false reports, Alibaba claims, caused harm to more than one million legitimate businesses on its Taobao platform in 2016 alone.

Specifically, Alibaba’s Governance Team says in the blog that 5,862 accounts in its intellectual property protection system were involved in malicious complaints. As a result, nearly 1.03 million merchants and over 6 million products were victims of schemes that amounted to a total loss of 107 million yuan (about $952,000) for merchants.

As for Hangzhou Wangwei, Alibaba says it will no longer process claims from the company, after determining the agency had withdrawn more than 60% of the complaints it had made since 2015 after sellers appealed the accusations.

Alibaba says it also had evidence suggesting Hangzhou Wangwei may have worked with distributors to lodge complaints against its customers’ competitors in order influence where consumers made purchases.

Alibaba will “not tolerate price-fixing on its platforms” and added it might pursue legal action if the agency continues to lodge allegedly malicious complaints against legitimate merchants.

In a statement on its website, as reported by the Wall Street Journal, Hangzhou Wangwei denied Alibaba’s claims.

The agency says that it only works with global brands or their authorized representatives in the “strict enforcement of legal and compliant intellectual property protection work.”

Alibaba plans to continue to identify other agencies that may have submitted false reports, while working to support legitimate merchants.

The company notes in the blog post that “it works closely with companies and has established programs that fast-track removal of counterfeit listings – bypassing the normal arbitration process – for companies with a strong record of submitting legitimate takedown requests.”

Additionally, the company says it has expanded its counterfeit fighting programs, including the MarketSafe initiative with the International AntiCounterfeiting Coalition.

Still, the company has come under scrutiny for allowing fake goods on its sites. In December, Taobao was one again added to the Notorious Markets List, four years after the site was removed from the list.

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