Under pressure from the U.S. government and vendors in various markets to crack down on counterfeiters, Alibaba has called on the Chinese authorities for clearer laws and higher penalties.
“Law-enforcement agencies often found it difficult to classify and quantify incidences of counterfeiting and also had difficulties building legal cases due to ambiguous counterfeiting laws,” the Chinese retail giant said in a statement, which claimed that the company’s strenuous efforts to curb counterfeiting have been often stymied by an inadequate regulatory framework in the country.
As a result, the authorities investigated only 1,184 cases of 4,495 possible leads on counterfeiting submitted by Alibaba in 2016. Only 33 or 0.7 percent of the cases resulted in convictions. Law enforcement was only able to build 469 cases from the 1,184 leads. Each of the cases involved goods of a value exceeding the statutory minimum of 50,000 yuan (US$7,274) for criminal investigation.
The company also held a press conference at its headquarters in Hangzhou to discuss its grievances.
Alibaba’s popular Taobao.com marketplace was included in December by the U.S. Trade Representative in the list of ‘Notorious Markets’ for 2016, after a long break, even as the company claimed to have used “big data” technologies to target, for example, 13 factories and shops that were selling knockoff RAM modules under Kingston and Samsung brands.
The USTR alleged that right holders in the U.S. and internationally “continue to report serious challenges to reducing high levels of counterfeit and pirated goods on Taobao.”
Alibaba said at the time that the decision of the USTR to include Taobao in the Notorious Markets led the company to question whether the move was based on actual facts or was an offshoot of the current political climate.
The company now says that current Chinese regulations are no longer able to cope with the need to fight counterfeiting. “Criminals can escape any legal consequence, leaving law enforcement agents and consumers feeling helpless, and society bearing the damage,” it said.
The progress in fighting counterfeiting has been negligible because the costs and risks of producing and selling counterfeits are too low, Alibaba added.