18 February 2022Trademarks

USTR lists Alibaba and Tencent sites in ‘notorious markets’ report

E-commerce sites operated by China’s Alibaba and Tencent have been included in the US Trade Representative’s annual “notorious markets list” for the first time, while removing any mention of Amazon’s foreign domains that had been listed in previous years.

Released yesterday, February 17, the “ 2 021 Review of Notorious Markets for Counterfeiting and Piracy” report said that the two companies—online marketplace AliExpress (owned by Alibaba) and Tencent’s messaging app WeChat—reportedly “facilitate substantial trademark counterfeiting”.

According to the report, while Alibaba is “known for having some of the best anticounterfeiting processes and systems in the e-commerce industry”, and its efforts were “laudable”, rights owners had noted a significant increase in counterfeits being offered for sale on AliExpress.

WeChat and Weixin, the China-facing version of WeChat, is reportedly viewed as one of the “largest platforms for counterfeit goods in China”, said the USTR, adding that the e-commerce ecosystem that “seamlessly functions within the overall WeChat platform and facilitates the distribution and sale of counterfeit products” was of particular concern.

China-based online markets Baidu Wangpan, DHGate, Pinduoduo, and Taobao continue to be listed, along with nine physical markets located within China that are known for the manufacture, distribution, and sale of counterfeit goods.

Notably, Amazon does not feature on this year’s list. Several of the e-commerce platform’s non-US domains had been listed as “notorious markets” in the past two years.

At the time of the release of last year’s report, an Amazon spokesman vehemently defended the company's record and described its inclusion as "nothing more than a desperate stunt in the final days of this administration".

US ambassador Katherine Tai said: “The global trade in counterfeit and pirated goods undermines critical US innovation and creativity and harms American workers.

“This illicit trade also increases the vulnerability of workers involved in the manufacturing of counterfeit goods to exploitative labour practices, and the counterfeit goods can pose significant risks to the health and safety of consumers and workers around the world.”

Overall, the report identifies 42 online markets and 35 physical markets that are reported to engage in or facilitate substantial trademark counterfeiting or copyright piracy.

It also noted that, amid the pandemic, government restrictions had resulted in some markets known for openly selling counterfeit goods reportedly having few of the “problematic” stores open.

“Some shops have adapted, however, with sellers of counterfeit goods transitioning from physical stores to e-commerce platforms and using the physical storefronts to facilitate the fulfilment of online sales,” said the report, adding that online sellers of counterfeits had also increased efforts to evade anti-counterfeiting processes and systems.

A Tencent spokesperson said the company "strongly" disagreed with the USTR's decision and was committed to working collaboratively to resolve it.

"IPR protection is central to our business. We take a comprehensive approach, based on industry best practices, to combatting counterfeiting and infringement on all of our platforms. We actively monitor, deter and act upon violations across our platforms by, for example, applying robust measures including education, enforcement and close collaboration with rights holders, government agencies and law enforcement.

"We have invested significant resources into IPR protection over the years and continue to improve our systems, procedures and technologies so we can better protect our own IP and the rights of others," said the spokesperson.

The USTR report also identified a new group of operators in the copyright infringement ecosystem: ‘piracy-as-a-service’, in which operators provide services that make it easy for would-be pirates to create, operate, and monetise a fully functioning pirate operation. This includes offering website templates that facilitate the creation of streaming websites, databases of infringing content, and dashboards that allow a pirate IPTV operator to oversee the infrastructure of their service.

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18 January 2021   The US Trade Representative has turned its attention to e-commerce and internet platforms in its latest Notorious Markets report on counterfeit goods.
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