Hangzhou
09 February 2017
Reporter: Mark Dugdale
Alibaba highlights takedown abuse
Alibaba Group has named and shamed a so-called intellectual property agency that is filing false complaints to badger and blackmail merchants on its ecommerce platforms in a bid to minimise a practice that is drawing resources away from legitimate enforcement actions.

Hangzhou Wangwei Technology has been banned from lodging takedown requests through Alibaba’s takedown platform for all of its ecommerce sites, including Tmall and Taobao.

According to Alibaba’s platform governance team, Hangzhou Wangwei has filed complaints against thousands of merchants across Alibaba platforms and multiple product segments, including women’s apparel, sporting goods, shoes, cosmetics and household appliances.

Hangzhou Wangwei has withdrawn more than 60 percent of its complaints when an appeal was lodged since 2015, a rate well above the norm, according to Alibaba.

Alarmingly, evidence suggests Hangzhou Wangwei may have worked with distributors to lodge takedown requests against their competitors in a bid to shut down their channels or drive their customers elsewhere. Alibaba said it would not tolerate price-fixing on its platforms and added it might pursue legal action if the agency continues to lodge what it deemed “malicious” complaints against legitimate merchants.

Hangzhou Wangwei is far from the only agency engaging in the kind of conduct that Alibaba has alleged.

Last year, 5,862 accounts in Alibaba’s intellectual property protection system were involved in malicious complaints.

Around 1.03 million merchants and more than six million products were the targets of schemes that amounted to a total loss of RMB 107 million for a wide range of victims, including major brand owners such as Nike.

Overall, Alibaba’s platform governance team said malicious complaints accounted for 24 percent of the total number processed, “serving as a drain on the group’s efforts aimed at stamping out counterfeits on its platforms”.

Chen Wenxuan, an Alibaba lawyer, commented: “The purpose of the IP rights system is to protect innovation, yet deliberately abusing the system for malicious or false complaints is unlawful behaviour infringing the principles of integrity and justice and will cripple innovation, acting like sand in the gears.”

Alibaba has long been criticised for not doing enough to fight counterfeiting on its ecommerce platforms. In December, the US Trade Representative returned Taobao to the Special 301 Out-of-Cycle Review of Notorious Markets, after a four-year absence.

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