Alibaba Group Holding Ltd. was cited again as a marketplace for fakes on a U.S. blacklist, another sign of increasing tension between the U.S. and China.
The Office of the U.S. Trade Representative on Friday included Alibaba’s Taobao online marketplace on its list of “Notorious Markets,” citing a high volume of reported counterfeiting and piracy. The agency acknowledged steps Alibaba has taken to make it easier for fakes to be removed, but said “the enforcement program reportedly continues to be burdensome and insufficient to end the sale of counterfeit products on the platform.”
In response, Alibaba’s President Mike Evans said in a blog post that the company’s presence on the list “is not an accurate representation of Alibaba’s results in protecting brands and IP, and we have no other choice but to conclude that this is a deeply flawed, biased and politicized process.”
Trade tension between the U.S. and China is increasing as China’s economy continues to grow quickly and its companies expand overseas. Chinese acquisitions of U.S. companies have been thwarted by lawmakers recently. Ant Financial, the Chinese financial services giant controlled by Alibaba co-founder Jack Ma, failed to win approval from a key U.S. government panel for its plan to buy MoneyGram International Inc.
The decision by the USTR is a blow to Alibaba’s international expansion strategy, which depends on winning the trust of U.S. and global brands. Alibaba dominates e-commerce in China, with Taobao and the company’s other shopping platforms accounting for the majority of online retail sales, but it’s a bit player in the U.S. still.
Alibaba said more than 230,000 Taobao stores were closed from September 2016 to August 2017. The company has also provided leads to law enforcement that resulted in more than 1,000 arrests and the closing of nearly 1,000 manufacturing and distribution locations.