Alibaba’s Taobao: China’s Dominant Ecommerce Platform
Growth, new records, new allegiances and international expansion – the Alibaba Group has had it all in 2018. Even long-term critic Richemont has agreed a partnership with Alibaba. All this was achieved after a tough start to 2018, by the inclusion of the Alibaba Group’s leading platform Taobao on the US ‘Notorious Markets’ list. The list aims to highlight platforms which “facilitate, turn a blind eye to, or benefit from substantial piracy and counterfeiting”. The European Commission recently published their first “Counterfeit and Piracy Watch List”; Taobao was not included on the list. Whilst not included in the EC Watch List, it was noted in regard to Taobao, the other core Alibaba Group platforms, Amazon and eBay “further progress is needed to ensure that offers of counterfeit products disappear from these platforms”.
Given the position of the European Commission, level of participation from major rightholders on Taobao, the level of proactive enforcement conducted by the Group and continued willingness to engage with rightholders, it is peculiar to see the e-commerce giant sharing a list with the likes of The Pirate Bay. As 2019 approaches, has Alibaba done enough to evade the US list of shame?
“Alibaba Has Established Industry Best Practices In IP Protection”
Alibaba has made it off the list before, by showing determination to work with rightholders and leverage technological solutions to reduce the prevalence of counterfeits across their platforms. In the latest iteration of the Notorious Markets list, Alibaba was dedicated over 1,000 words to justify inclusion, significantly more than any other online platform. For comparison, The Pirate Bay was covered in under 250 words and Russian social media leader “VK.com” in under 200 words. With the expansion of the Alibaba Anti-Counterfeiting Alliance (AACA), Alibaba has rounded-up a formidable roster of over 100 brands, including US brands; Apple, Ford, Pfizer and P&G. It is possible Alibaba’s most recent inclusion provided the impetuous for increased efforts in outreach and engagement with rightholders.
Politics, Trade & International Co-operation
Trade relations between China and the United States have deteriorated over the course of the year. Both sides trading tit-for-tat in terms of tariffs on electronics, vehicles, commodities, foodstuffs and many more categories. It can be argued previously including Taobao on the list was a negotiating ploy to effect change in Alibaba’s policies, this rationale has now been exhausted by the success of the AACA. However, Alibaba may well turn out to be collateral damage in the current political trade tariff squabble.
It must also be noted the American Apparel & Footwear Association have pushed for Amazon to join Alibaba on the list. As the scope of the Notorious Markets lists excludes US platforms, regional Amazon platforms covering the UK, Germany and Canada have been cited. Perhaps the USTR is being used to circumvent the need for effective international cooperation regarding the modernisation of IP law to handle digital environments and innovations. If both Amazon and Alibaba make the January 2019 published list, maybe the only winner is the struggling high street.
Chinese New E-Commerce Law Impact
Starting 1 January 2019, all Chinese e-commerce platforms will have to contend with the new e-commerce law, which includes large fines for platform operators who fail to take steps against IP infringement. Whilst the impact of this new piece of law is yet to be determined, Taobao and Alibaba platforms already have sufficient measures in place and the resources to make any necessary changes to comply. We are unlikely to see any major players such as Taobao, be the subject of large fines under the new IP provisions in the e-commerce law.
Third Time Lucky?
Taobao has been listed as a Notorious Market for the past two years, hitting back sharply both times with strong public relations campaigns. Widespread endorsement of the AACA by major US and non-US rightholders makes it almost absurd for Taobao to be again included. However, given current China-US relations, it would not surprise many to see China’s largest e-commerce platform be the “scapegoat” for trade, economic and diplomatic issues.