Taobao talks tough about counterfeits

China Daily, May 11, 2011

China's largest online retail site said it will strengthen efforts to examine goods sold on its portal to further fight online counterfeits.

The sale of fake goods is a headache for Taobao, which has more than 70 percent of China's online shopping market.

The company was named a "notorious market" for piracy by the United States Trade Representative (USTR) in March.

Jack Ma, chairman of e-commerce giant Alibaba Group Holding Ltd, which owns Taobao, said the company will increase the number of employees responsible for checking and dealing with counterfeits this year and work more closely with companies both in and out of China to reduce the number of fake goods offered for sale on the site.

"If Taobao wants to exist in the future, there will be two important issues - the fight against counterfeits and protection of intellectual property rights," Ma said at a press conference.

He said the company will further expand its anti-counterfeit team from the current 2,000 people, which already comprises half of Taobao's total number of employees.

A new initiative from the shopping portal to examine advertising and sales activities was praised in a report issued by the USTR earlier this month.

The 2,000 Taobao employees inspect online offerings and when they suspect possible counterfeits, they buy them and conduct detailed examinations. The company then cooperates with authorities to fight those selling fake goods.

Taobao said it dealt with copyright infringement cases that offered 14 million items for sale last year and cooperated with more than 6,000 brands and rightful owners.

The company has now invested 300 million yuan ($46.2 million) to protect the rights of buyers.

Ma said "Taobao alone cannot root out the problem - which is also widespread in trading outside cyberspace".

Government efforts to tackle counterfeits have increased, with nine ministries including the Ministry of Commerce and the Ministry of Industry and Information Technology jointly announcing in April that they will implement harsher measures for online counterfeits.

From December last year to March, 410 websites were shut down for copyright piracy and online counterfeits, according to official figures, and more Internet companies are taking the initiative to act against infringements.

Baidu Inc, the country's largest search engine, said it will offer a service for users to listen to and download legal music for free.

The search engine was also named a "notorious market" by the USTR due to its service that enables users to search, stream and download music for free by directing them to sites with illegal content.