Taobao Cited by USTR for Anti-piracy Effort

The Office of the United States Trade Representative (USTR) has named Taobao, China’s biggest online retailing website, as a major haven for the sale of counterfeit products while also acknowledging the company has taken significant steps to control the problem.

In a new report on global intellectual property rights infringement, the USTR identified more than 30 Internet sites as well as bricks-and-mortar venues as “notorious markets” that support the illegal sale and distribution of fake and pirated goods. In addition to Taobao, the list includes Baidu, China’s dominant Internet search engine, which is known for its links to websites containing pirated music and other digital content; Beijing’s infamous Silk Market shopping mall; the Ladies Market in Hong Kong; Luowu Market in Shenzhen; and ThePirateBay file-sharing website in Sweden. The USTR said the list was published to encourage authorities to step up intellectual property rights enforcement.

Taobao, which does not sell products to consumers but plays online host to millions of Chinese vendors, has already boosted its efforts to keep fake consumer electronics, cosmetics and other products off the site. The company said that more than 14 million listings for copyright and patent infringing goods were removed last year. In addition, 590,000 registered Taobao sellers were penalized for infringement in 2010.

But with more than 300 million registered users and 450 million products for sale on the site at any given time, Taobao faces an uphill struggle in its screening efforts—a fact acknowledged by the USTR. The agency report states:”While recognizing that Taobao is making significant efforts to address the availability of infringing goods through its website, it still has a long way to go in order to resolve those problems.” Taobao recently ranked in the 15 most visited sites in the world, and in the five most visited sites in China, the USTR noted.

Taobao was the only “notorious market” recognized in the USTR report as having an anti-piracy campaign. In a prepared statement, Taobao officials said “We appreciate the USTR’s acknowledgment of our ongoing efforts to work with brand owners in protecting their intellectual property rights.” The company promised to “further enhance the level of trust and integrity in our online marketplaces for the benefit of all our stakeholders.”

During a Nov. 10 conference on intellectual property rights (IPR) held in Beijing, Taobao Chief Financial Officer Daniel Zhang called on brand owners, authorities and others to work together to beat back a rising tide of fake goods being sold online. “Taobao is one of many stakeholders in this issue and needs the help of brand owners and others to effectively address the problem,” Zhang said at the first annual IPR Dialogue, a meeting organized by outgoing U.S. Ambassador to China Jon Huntsman.