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Alibaba Tries to Do Damage Control Amid Counterfeit Backlash

Alibaba Group Holdings Ltd. and Founder Jack Ma As Company Files for U.S. Initial Public Offering of E-Commerce GiantAlibaba Group Holdings Ltd. and Founder Jack Ma As Company Files for U.S. Initial Public Offering of E-Commerce Giant
The Alibaba-owned site Taobao is known as a marketplace for counterfeit goods.Photograph by Bloomberg Bloomberg via Getty Images

Chinese e-commerce juggernaut Alibaba is in damage control mode on Monday following the backlash the company is facing over counterfeit items being sold via its marketplaces.

Alibaba’s flagship e-commerce marketplace Taobao, which sells everything from scorpions to fake Louis Vuitton purses, has been known for selling counterfeit goods. Taobao is similar to eBay in that it doesn’t sell items—rather its nine million small sellers are selling to the Chinese demographic.

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Last month, Alibaba gained acceptance into the respected Washington, D.C.-based International Anti-Counterfeiting Coalition, prompting a number of the Coalition’s brands, including Gucci America and Michael Kors, to retaliate by quitting the group. The brands even went as far as describing Alibaba as “our most dangerous and damaging adversary.”

It was also revealed that IACC president Robert Barchiesi owned Alibaba stock, potentially conflicting his role leading the coalition.

Thus, on Friday, the Coalition said it was suspending Alibaba’s membership following the backlash from brands. On Sunday, Alibaba vowed to keep fighting counterfeit goods despite the recent events.

“We believe that Alibaba, as the world’s largest e-commerce platform, plays an important role in tackling and solving counterfeiting issues across the globe,” Alibaba said in a statement to China National Radio, as reported by CNBC. “Alibaba will discuss and communicate more thoroughly with more brands in order to push forward the course of international anti-counterfeiting.”

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The tech giant added that the backlash “will not affect the existing relationship nor the projects that both sides are working on together.”

Alibaba has been attempting to block counterfeiting of late. The company recently said it spends millions each year on anti-counterfeiting measures. It also hired a former Pfizer executive to oversee its anti-counterfeiting programs last December.

Still, that doesn’t seem to be enough for now.