The Motor Equipment Manufacturers Association (MEMA) and the Automotive Aftermarket Suppliers Association (AASA) have joined the Auto Care Association in calling for online retailer Alibaba.com to be added to the Office of the U.S. Trade Representative’s (UTSR) Notorious Markets List for its history of dealing in counterfeit auto parts.
Alibaba.com is a Chinese e-commerce company that provides services via a number of Web portals. It’s eBay-like Taobao portal is one of the 20 most visited websites in the world.
“This is a safety issue, and we need to take action,” said MEMA President and CEO Steve Handschuh. “Counterfeit motor vehicle parts create a hazard on our roads. Goods offered as genuine brands and readily available on popular websites hurt our economy and put our companies and jobs at risk, but more importantly they imperil public safety.”
Alibaba has long offered an enormous amount of counterfeit goods on its sites, and NetNames (a brand protection services firm) has said its clients think that nearly 80% of the merchandise sold under their brands on the Taobao site is counterfeit.
In August, a U.S. judge dismissed part of a lawsuit filed by Gucci and other luxury brands that accused the company of promoting counterfeit goods. The lawsuit clams that Alibaba and 14 other companies selling counterfeit goods created an enterprise that sold knock-off luxury items like fake Gucci handbags. The judge ruled that the suit failed to prove the existence of an enterprise under federal racketeering laws.
The company was removed from the Notorious Markets list in 2011 because of its efforts to address counterfeit sales (Taobao was removed from the list in 2012). However, the auto industry groups are still concerned about the large number of fake auto parts and lax enforcement efforts.
“Counterfeit parts harm suppliers and rob them of valuable intellectual property rights,” said Bill Long, president and chief operating officer of AASA, the light vehicle aftermarket division of MEMA. “But perhaps more importantly, they pose a threat to motorists and repair technicians who unknowingly may install inferior and potentially dangerous parts on their vehicles.”
That assertion is backed up by data from the Chinese government. In a study released in October, the Chinese State Administration of Industry and Commerce found that 34.6 percent of goods traded on the country’s major e-commerce platforms are substandard.
A previous government study found that more than 40 percent of goods sold online in China were either counterfeit or of poor quality.
A number of other organizations joined MEMA in signing the letter, including American Apparel & Footwear Association (AAFA); AFL-CIO; Auto Care Association; Fashion Accessories Shippers Association (FASA); Fashion Jewelry & Accessories Trade Association; Rubber and Plastic Footwear Manufacturers Association; Travel Goods Association (TGA); UNION DES FABRICANTS (UNIFAB); Federation of the Swiss Watch Industry FH (HFS); Istituto di Centromarca per la lotta alla contraffazione (INDICAM); Norwegian anti-counterfeiting group (NACG); and the Asian Coalition Against Counterfeiting And Piracy (ACACAP).
Last year, the USTR said it would closely monitor the company’s activities, and warned that Alibaba’s enforcement program was slow and difficult to use. At the time, MEMA released a statement applauding the warning.
At the end of 2015, Alibaba Group named Pfizer and Apple veteran Matthew Bassiur as its vice president and head of global intellectual property enforcement. Bassiur was also a federal prosecutor in the Computer Crime & Intellectual Property Section of the U.S. Department of Justice. The company also expanded its IACC MarketSafe program with the International Anti-Counterfeiting Coalition.
MEMA and other other groups have continued to lobby to have the sites put back on the Notorious list.
“Urgings by USTR have not proven to be enough,” Handschuh said in a statement on the organization’s website. “MEMA member companies continue to experience misrepresentation by Alibaba and its platform websites in dealing with suspected counterfeit products. Despite MEMA member companies attempts to engage and build relationships with Alibaba, counterfeit motor vehicle parts bearing unauthorized trademarks are still sold on the sites.”
Alibaba founder Jack Ma, meanwhile, has remained defiant in the face of lawsuits and regulatory pressure, and has even defended the sale of counterfeit goods. At an investor’s conference over the summer, he said that counterfeiters often product “better quality, better prices than the real products, the real names.”
