Alibaba’s Counterfeit Curse Strikes Again

The company doth protest too much. And this time, it’s really awkward: At the same time that Alibaba co-founder Joe Tsai announced he was purchasing 49 percent of the Brooklyn Nets NBA franchise, the company’s shopping sites were loaded with fake Nets gear.

In some cases, the counterfeits should have been obvious to buyers: A $7 jersey with blurred-out labels, a purple sweatshirt with “Brooklyn” and the player number cut and pasted onto it in Photoshop – or heck, maybe even Microsoft Paint; it doesn’t take professional tools to make fake merch look this bad.

But in the end, it’s not the quality of the counterfeits that’s at issue here; it’s the fact that they continue to proliferate on the marketplace at all.

Alibaba expressed dismay and even offense when, around this time last year, the U.S. Trade Representative placed it back on the Notorious Markets List for facilitating “substantial copyright piracy and trademark counterfeiting.”

“Commercial-scale trademark counterfeiting and copyright piracy cause significant financial losses for right holders and legitimate businesses, undermine critical U.S. comparative advantages in innovation and creativity to the detriment of American workers, and can pose significant risks to consumer health and safety,” the list says by way of introduction.

That’s not to say that Alibaba CEO Jack Ma himself is hanging out in a basement somewhere, printing fake jerseys to cheat legitimate rights-owners out of money or harm the public.

However, fake products continue to find their way onto Alibaba’s marketplace platform, Taobao, via third-party sellers, and the U.S. government apparently doesn’t think the company is doing enough about it, despite Alibaba’s alleged efforts to curb the counterfeiting problem on its site.

Alibaba said it had been making efforts to clean up its act, and had steered clear of the Notorious Markets List since being removed from it four years prior.

The company uses machine learning and other technologies to identify and take down counterfeit merchandise. It also relies on brands that hold the rights to team names and logos to catch fakes that its artificial intelligence tools may miss.

Forbes noted that Alibaba has sued several fake goods sellers and worked with law enforcement to raid counterfeiting factories. According to that report, Ma blames China’s weak counterfeiting laws, and industry experts agree that the laws could stand some beefing up.

However, Forbes also theorizes that, due to the scope and complexity of the problem (to say nothing of the scope and complexity of Alibaba), it’s likely that Taobao will never be entirely free of fake goods, despite even Ma’s best efforts.

The president of Alibaba, Mike Evans, suggested that the decision to put Taobao back on the Notorious Markets List may have been influenced by the political climate following the election of President Donald Trump, who has criticized the trade relationship between the U.S. and China.

However, this most recent incident with the Brooklyn Nets suggests that the U.S. decision may have been well-founded after all.

“Right holders in the United States and internationally continue to report serious challenges to reducing high levels of counterfeit and pirated goods on Taobao,” said the U.S. report. “Longstanding obstacles to understanding and utilizing basic IP enforcement procedures continue unabated.”

While the company claims to have shut down 180,000 merchant storefronts on its sites, and while the fake Brooklyn Nets merchandise was removed as soon as it was brought to Alibaba’s attention, the Chinese eCommerce giant’s actions are simply eliminating the symptoms without curing the disease.

Just because the Nets merch is all clear now doesn’t mean there aren’t thousands of fake listings for other NBA team jerseys and professional sports gear.

Ma has taken a stand against counterfeiters, last spring penning an open letter to National People’s Congress delegates asking them to punish counterfeiters with jail time.

“If the penalty for even one fake product manufactured or sold was a seven-day prison sentence, the world would look very different, both in terms of intellectual property enforcement and food and drug safety, as well as our ability to foster innovation,” Ma wrote.

Alibaba has been trying to get more Western brands to sell on its platform. The inclusion of the $200 billion company on the Notorious Markets List is a definite setback, albeit one of its own making.