Alibaba may best be known as the e-commerce giant that's kind of a hybrid between Amazon and eBay with a little bit of PayPal mixed in. But the company, (one of Fast Company’s Most Innovative Companies in 2015 ) has another reputation of which it's not as proud: a haven for counterfeit products.
According to China Daily, Alibaba has already invested more than 1 billion yuan ($154 million) in fighting against counterfeit products. But on Monday the company announced that it will add 200 people to the 2,000 full-time employees (and 3,000 part-time volunteers) already responsible for fighting counterfeit products on its online platforms.
The announcement comes after a year in which Alibaba's market value slid more than $50 billion amid lawsuits and criticism from Chinese and U.S. regulators, according to Bloomberg News.
The company removed 90 million product listings before its record-breaking 2014 initial public offering, which raised $25 billion. Under its current system, brands use an online complaint platform to report infringements, and accused sellers have three days to refute allegations with evidence. In contrast, Amazon's anti-counterfeit policies include immediate suspension of selling privileges and the destruction of inventory held in its fulfillment centers.
Alibaba makes its money through advertising revenue from Taobao, and since third-party merchants hold the products for sale, it’s more difficult for the company to verify if they are legitimate.
The U.S. office of the trade representative issued a warning to Alibaba that its efforts to fight piracy and respond to complaints would be monitored in 2016 and that it had to increase its anti-counterfeit efforts in order to stay off the "Notorious Markets" blacklist in the upcoming year. Rights holders have criticized Alibaba's enforcement program as too slow, difficult to use, and lacking transparency.
In addition to the 200 anti-counterfeit hires the company is making, Alibaba has also appointed a former Apple cybercrime and counterfeits investigator, Matthew Bassiur, to oversee its international efforts to combat piracy, the company said in a statement.