Counterfeit Product Tsunami Accompanies $20b Alibaba IPO
IPO moves forward despite allegation of racketeering, counterfeit sales.
Los Angeles, CA, August 25, 2014 - Alibaba's websites are the largest e-commerce platform in the world and the ideal host for dispensing $1 trillion in counterfeit goods worldwide, 90 percent of which originate in China. Alibaba’s activities account for 50 percent of all parcels shipped in China
Alibaba claims to have removed a whopping 115 million infringing or counterfeit product listings last year, yet all the counterfeit products below (and many more) were easily purchased by The Counterfeit Report® on Alibaba’s websites. Manufacturers and consumers lose billions to counterfeit product purchases which often go undetected until they fail, are returned for warranty, or cause an injury. Some are deadly.
All Counterfeit Products -- Clockwise from left; Bose Quiet Comfort QC15 Headphones, Gillette Mach 3 Razor Blades, Otterbox Defender Cell Phone Case, Supra “Justin Bieber” Muska Skytops, MAC Mineralize Blush. Chanel, Acqua Di Gio, Daisy, Infusion D’Iris, and Coco Fragrances, Gerber Bear Grylls Ultimate Knife, Invicta Pro-Diver Watch, Montblanc Meisterstuck Pen. (Photo TheCounterfeitReport.com)
Counterfeit and intellectual property rights protection is severely lacking, allowing Alibaba to reap billions in revenue and profit from unsuspecting consumers, while manufacturers suffer and consumer health and safety is at risk. In spite of manufacturer’s clear and vocal objections, not enough is being done to stop counterfeiting and brand damage, and the activity continues.
Alibaba’s solicitation of $20 billion in IPO investor funding only serves to further exacerbate a devastating global criminal enterprise. In its SEC IPO filing, Alibaba’s claims "Although we have adopted measures to verify the authenticity of products sold on our marketplaces and minimize potential infringement of third-party intellectual property rights ... these measures may not always be successful." Alibaba adds, "We may be subject to allegations and lawsuits claiming that items listed on our marketplaces are pirated, counterfeit or illegal."
Such was the case in the recently unsealed July 9, 2014 lawsuit filed in US District Court against Alibaba Group Holding Ltd. et al.
“Together, the Alibaba Defendants and the Merchant Defendants are an enterprise whose intentional and repeated sales of Counterfeit Products into the United States constitute a pattern of racketeering pursuant to l8 U.S.C. § 1962(c).”– Kering S.A., Plaintiff.
Kering S.A., whose brands include popular Gucci, Saint Laurent and Bottega Veneta products alleged "The Alibaba Defendants, facilitate and encourage the sale of an enormous number of Counterfeit Products through their self-described "ecosystem," which provides manufacturers, sellers, and buyers of counterfeit goods with a marketplace for such goods, and provides online marketing, credit card processing, financing, and shipping services that effectuate the sale of the Counterfeit Products." Kering identified hundreds of sellers openly offering up to 200,000 units a month of Plaintiff’s counterfeit products on the defendant’s Alibaba websites.
Alibaba spokeswoman Florence Shih said a dismissal was granted for specific Alibaba Group co-defendants after dialog between the two companies who agreed to work together in good faith. Absent was any consideration of other brand owners who still fend for themselves.
In December, Alibaba offered to remove unauthorized sellers listings for United Kingdom brands that opened official shops on Alibaba’s Tmall.com. This simple strategy enables Alibaba to obtain commissions or transaction fees from brand owners, but also leaves non-paying brand owners unprotected from Alibaba’s shady practices and economic hazards.
While relatively unknown in the US, Alibaba, and subsidiary websites including AliExpress are significant in the global proliferation of counterfeit goods which destroy companies whose brands America and the world have come to trust, while risking consumer health and safety.
Alibaba’s activities have not gone unnoticed by the US Government, who just last year removed Alibaba from its “Notorious Markets” list which identifies select online and physical marketplaces that reportedly engage in, and facilitate substantial piracy and counterfeiting. Yet China was added to a watch list in April for not doing enough to fight counterfeiting and intellectual-property crimes.
The US focus should be economic growth for America and renewing efforts challenging this illegal activity, not forwarding investor support for criminal activity that destroys US companies, weakens economies and threatens the health and safety of consumers.
A forensic examination of Alibaba by the SEC, and increased consumer awareness of e-commerce counterfeiting practices would be effective in ending Alibaba’s practices, not encouraging them. Alibaba is about to join the already burgeoning US e-commerce distribution of deceptive, hazardous and deadly counterfeit products. After all, it's US consumers who ultimately get hurt. Caveat emptor.
Website: www.TheCounterfeitReport.com
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The Counterfeit Report® is the first and only website to provide consumers a free and informative visual guide to detecting counterfeit products and promote consumer awareness. Manufacturers can immediately list and update their counterfeit product information in a central venue for the greatest mass-consumer exposure, and benefit from enhanced brand protection and direct consumer education. The Counterfeit Report uses thousands of authentic and counterfeit product photos to show consumers the sophistication of counterfeiters and their ability to create visually identical counterfeit products and packaging specifically designed to deceive. Consumers can also report seeing or purchasing counterfeit products and the source directly to the manufacturer on the website.
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