The U.S. Trade Representative’s Office (USTR) has placed Chinese eCommerce site Pinduoduo.com on a blacklist, along with other sites the organization says are involved in copyright infringement and counterfeiting, according to a report from Reuters.
The site is the third-largest online marketplace in the country. The USTR, which reviews sites annually, also placed the largest site, Alibaba Group’s taobao.com, on the list.
The move to blacklist comes as the U.S. and China are negotiating to end a tariff standoff that has cost both countries billions. The talks are set to resume next week.
The inclusion of Pinduoduo “reflects the urgent need to remediate a range of intellectual property-related concerns,” a USTR spokesperson said. “Many of (the site’s) price-conscious shoppers are reportedly aware of the proliferation of counterfeit products on pinduoduo.com, but are nevertheless attracted to the low-priced goods on the platform.”
Alibaba said it was working on addressing counterfeit products on its platform, and that it didn’t agree with the inclusion of taobao.com on the list. A spokesperson said the site was looked at as “best in class” by members of the industry.
“In fact, zero industry associations called for our inclusion in the report this year. We will continue to wage this fight against counterfeiters,” said Brion Tingler, head of external affairs.
Pinduoduo has had its own issues: In January, the site announced that an online collective had stolen tens of millions of yuan worth of discount vouchers. Reuters, citing Pinduoduo, said the group took advantage of a loophole on the platform to steal the vouchers. The company said the bug was immediately fixed and the incident was reported to the police.
Pinduoduo’s marketplace enables consumers to group together to receive deeper discounts on a variety of products, from gadgets to clothing. The news may hurt the reputation of the startup, which last August raised $1.63 billion in the second biggest U.S. listing of a Chinese company. At the time, Pinduoduo had a valuation of $23.8 billion.