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Alibaba’s Jack Ma: Counterfeit hurts us too

Clinton Global Initiative's 10th Annual Meeting - Day 3Clinton Global Initiative's 10th Annual Meeting - Day 3
Alibaba Executive Chairman Jack Ma Michael Loccisano Getty Images

Alibaba Executive Chairman Jack Ma took to the media to proclaim that the sale of counterfeit or pirated products hurts his company as much as any other business.

Ma told Xinhua news agency that his e-commerce company stands to lose five customers for each fake product sold on its sites. Counterfeits don’t just hurt consumers and stores, he added, but also the economy in general. He likened his company and the Chinese economy to “conjoined twins.”

Ma’s statements come after renewed criticism by a U.S. trade group about Alibaba’s commitment to fighting against knock offs. Last week, the American Apparel & Footwear Association called on the U.S. Trade Representative (USTR) to impose direct sanctions against Taobao, a Alibaba-owned e-commerce site that the AAFA called “synonymous with counterfeits.”

AAFA wants the trade representative to put Alibaba (BABA) and Taobao back on its Notorious Markets list, which highlights retailers and online marketplaces that sell pirated software, purses, and other items of doubtful provenance. The USTR took Taobao off the list in 2012 with the understanding that the site would be more vigilant in policing itself AAFA apparently thinks that has not happened.

Taobao, which has long been accused of being a hotbed of counterfeit products— sells clothing, toys, and other goods. A group of luxury goods makers sued it in May over the counterfeit issue. And, during the recession computer equipment makers started selling pirated products on the site raising another kerfuffle.

Still, Ma told Xinhua that Alibaba, a competitor to Amazon (AMZN) and eBay (EBAY), has cooperated fully with authorities. Alibaba held a blockbuster initial public offering last year but has since had a rocky year. Allegations that it sells counterfeit products doesn’t help its image.

“I don’t believe success can built on dishonesty,” Ma said.

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For more on earlier allegations of counterfeit, see the video.