Alibaba Joins Anti-Counterfeit Group as First E-Commerce Member

HANGZHOU, China — Alibaba Group Holding Ltd. will be the first Internet retailer to become a member of the largest nonprofit global organisation that fights counterfeit products and piracy, part of the Chinese company's effort to shed its image as a haven for cheap brand knockoffs.

The company has joined the International AntiCounterfeiting Coalition, which unveiled a new type of membership for "intermediaries" such as online marketplaces where counterfeits — everything from headphones to designer purses and sports memorabilia — can flourish. Alibaba reaches more than 400 million online shoppers in China, mostly through its Tmall and Taobao sites.

Chairman Jack Ma two years ago referred to counterfeit goods as a cancer for the marketplace and pledged to clean up the company's image. His company's been working with the IACC since 2013 through a program that has resulted in 5,000 sellers being banned from Alibaba's marketplaces and 160,000 product listings removed. Still, regulators in China and the US continue to monitor its efforts. In December, the US Office of the Trade Representative warned that the company needed to do a better job fighting the sale of counterfeit goods and pirated materials if it wished to remain off the government's annual "Notorious Markets" list.

“Alibaba didn’t have a stellar reputation,” said Bob Barchiesi, president of the IACC. “They are doing what they can to show people it’s a safe and trusted marketplace.”

Cutting Pirates Off

The IACC’s 250 members include prominent apparel, electronics and luxury goods brands including Nike, Apple and Rolex. The group wants to include online marketplaces to replicate a similar partnership it forged with credit-card companies several years ago to fight counterfeit products by severing payments to their makers and sellers, Barchiesi said.

To bolster Alibaba’s efforts, in December the company hired Matthew Bassiur, a former Apple Inc. cybercrime and counterfeits investigator and US Department of Justice prosecutor, to oversee its international push to fight counterfeits.

Part of Bassiur’s role is educating the world about Alibaba’s efforts, including identifying and banning sellers and finding the sources of counterfeit goods so law enforcement can be notified, said Bassiur, Alibaba’s vice president in charge of intellectual property protection.

“Every e-commerce company in the world will have a counterfeiting problem,” he said. “The question is, how devoted are they to solving it? We are part of the solution.”

By Spencer Soper; editors: Jillian Ward and Edwin Chan.