Alibaba Defends Itself Against Counterfeit Accusations

Alibaba Group Holding has alleged that an intellectual property (IP) agency was filing false complaints against vendors on its eCommerce platforms, calling for a boycott of the agency.

The IP agency, also known as a “reputation protection” firm, is hired by businesses to help manage their IP rights. Fortune reported that Alibaba singled out Hangzhou Wangwei Technology as an abuser of its system, adding that it would no longer process claims made by the firm.

The company stated that claims made by the IP agency have hurt more than 1 million merchants on the Taobao platform in 2016. The decision to not process claims from Hangzhou Wangwei was a result of an investigation that showed the firm had withdrawn over 60 percent of its complaints after counter-appeals from merchants. Alibaba said it would now investigate claims for merit and give merchants time to respond before penalizing them.

Alibaba has been hit with its fair share of counterfeit complaints, with allegations of false goods being sold on its sites. In December, the United States returned Taobao, China’s most popular consumer-to-consumer shopping website, to its blacklist of “notorious marketplaces” known for the sale of counterfeit goods and violations of intellectual property rights.

The counterfeit claims haven’t slowed down the company from expanding its business. Last week, Alibaba announced it had opened headquarters in Melbourne, supporting the 1,300 Australian and 400 New Zealand businesses selling on Tmall and Tmall Global, Alibaba’s online retail platforms, according to CNBC.