US report raps Alibaba's Taobao, others for pirated goods

Alibaba got a big lump of coal for Christmas yesterday when the U.S. Office of the Trade Representative added Taobao, its e-Bay-like small seller platform, back onto a list of notorious counterfeit platforms that includes the likes of torrent site Pirate Bay. Alibaba (BABA, -0.52%) was last on the list in 2012.

Not surprisingly, the company complained. “The decision ignores the real work Alibaba has done to protect IP rights holders and assist law enforcement to bring counterfeits to justice,” Alibaba president Michael Evans said. Alibaba says it removed 380 million listings and closed 180,000 stores over the year ending in August.

But the protests ring hollow. From inside China, you can search Taobao and still find hundreds, often thousands, of illegitimate or suspect products from top brands. These results don’t pop up in searches overseas because Alibaba has essentially walled off the Chinese Taobao from its worldwide marketplaces. As much as 90% of New Balance’s 117,000 listings on Taobao are counterfeit or dubious goods, the Boston-based company last estimated. A search for Disney’s Star Wars-branded gear on Thursday finds 102,000 items listed, many suspect, while unlicensed ugly Christmas sweaters featuring professional sports teams abound. I know because I recently bought one—imitation NHL tag and all—off Taobao.