market for counterfeits: Is the U.S. Trade Representative really
to get China to crack down, or is it just seeking to exact revenge
behalf of Google?
Finance East Day, People's
Republic of China
U.S. Piracy Claim
Against Baidu and Taobao Called 'Revenge' for Google Spat
office of the U.S. Trade Representative cracking down on Chinese search engines
Baidu and Taobao for being 'notorious markets' for pirated goods - or is it
simply retaliating for Google's controversial withdrawal from the China market?
According to this news item from China's state-controlled Finance East Day, oneChinese analyst suggests that Beijing must stand up to the U.S. for
smearing Baidu and Taobao, and respond with 'counter-sanctions.'
Recently, the office of the
U.S. Trade Representative created a major stir by listing [search engines]
Baidu and Taobao as "notorious markets," accusing the companies of
selling pirated or counterfeit goods. The two companies failed to respond to
requests for comment.
The U.S. Trade Representative
said in a report that Baidu's use of "deep-linking" to lead buyers
into buying pirated goods is the most prominent example. The information for
such products are usually stored on third-party Web sites. Deep linking leads
users directly to a specific Web page, but not a home page. And although Taobao
has made "significant efforts" in the fight against counterfeit
products, the USTR reports says it still has "a long way to go" in
order to eliminate the problem.
Taobao didn't publicly
respond yesterday. But the company doesn't think the counterfeit goods problem
is worsening, and has said it's committed to protecting intellectual property
rights. Recently, Taobao Chief Financial Officer Zhang Yong told reporters that
it is the duty and obligation of Taobao to respond to national calls to
cooperate with the government to protect intellectual property. He also said
that only with great difficulty can business successfully battle
He said, for example, that
there are millions of sellers and over 800 million products on Taobao, and that
the company has adopted several automated and manual means of investigation to
crack down on counterfeit products, including reports from consumers. Last
year, the company dealt uncovered over 14 million pirated products, but was
unable to completely eliminate the problem of counterfeits. The company has
announced plans to join forces with the nine government ministries to crack
down on counterfeit goods and regularly provide police with information on
those businesses selling fake products.
Expert: Using 'notorious' to suppress Chinese firms
Mingdun, professor at Beijing University of Posts and Telecommunications, says
that the U.S. Trade Representative has unilaterally developed a set of
one-sided standards, finds fault with foreign firms, is using intellectual
property rights to suppress Chinese enterprises, and is acting in retaliation
for Google's withdrawal from China market.
Xie Mingdun also suggested
that with Chinese businesses being so unfavorably labeled when no single
enterprise is capable of addressing the problem, the government must respond
and not allow individual businesses to fall victim to this policy of trade
suppression. He suggested that while China should strengthen legislation on
intellectual property rights, it also needs to take a much harder line when it
comes to America's complaints and initiate counter-sanctions.
Recently, the office of the
U.S. Trade Representative said there are over 30 Internet and physical markets
that sell counterfeit and pirated goods on "notorious markets."
Chinese businesses mentioned as "notorious markets" include, Silk Street, Beijing
Dragon and Shanghai Yangpu Ego Digital City, Shenzhen Luohu Market, Hong Kong
Ladies Market, Yiwu Commodities Market, mobile entertainment portal 91.com and
In addition, the list also
includes Ecuador, Paraguay, Indonesia, Argentina, India, Ukraine, the
Philippines, Thailand, Mexico, Pakistan and Colombia as notorious physical