Alibaba Group Holding Ltd (BABA) Convenes With China Regulator Over Fakes Scuffle

Alibaba Group Holding Ltd (NYSE:BABA)

Alibaba Group Holding Ltd (NYSE:BABA) CEO Jack Ma met with the head of China’s State Administration for Industry and Commerce (SAIC) on the same day that the commerce regulator has publicly criticised the giant internet retailer for allegedly tolerating the proliferation of fake goods in its sites. The meeting, which was initiated by the SAIC itself, resulted with the regulatory agency withdrawing its initial hard stance on Alibaba over supposed illegal business activities.

In a statement posted at SAIC website, CEO Jack MA is quoted as saying that Alibaba Group Holding Ltd (NYSE:BABA) “have always been committed to combating fake products,” and has allocated its time and effort to put a solution to the problem. Ma committed to cooperate with authorities in addressing the issue, and the two sides have agreed to promote the orderly development of a healthy Chinese e-commerce by working with one another.

Alibaba Group Holding Ltd (NYSE:BABA)SAIC has described Alibaba Group Holding Ltd (NYSE:BABA) as “steadfast and resolute” in its campaign against counterfeit merchandise, a far cry from the harsh criticism it issued against the retailer prior to the meeting.  The criticism, which the agency referred to as a “white paper”, alleged that Alibaba sold products that were either banned, substandard, fake, or otherwise violates trademarks. The statement issued after the meeting, however, clarified that the prior report was not a white paper and is not legally binding. White papers are known to carry with it political positions on a matter of concern.

Officials from Alibaba Group Holding Ltd (NYSE:BABA)’s Taobao site, which was particularly lambasted by SAIC over fake goods, accused the regulatory agency’s  Liu Hongliang of using inappropriate techniques in carrying out investigations. With the SAIC withdrawing its allegations, both sides have agreed to coordinate on matters like establishing new mechanisms to fight counterfeiting. “The most recent S.A.I.C. posting speaks for itself. We feel vindicated,” Alibaba said in a statement through a representative. An additional 300 staff will be hired by Alibaba for the purpose of bolstering its position against counterfeiting.

This article has been written by Nonito Guntan.

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