IACC should give Alibaba a second chance in crackdown on fakes

It has also established a 24-hour all-day online and offline system to crack down on fake goods within the legislative framework, or provide crucial information to law enforcement agencies to assist them fighting against fake products.

Alibaba has also established a fake goods compensation system. Once the products consumers purchased on the platforms are recognized as fake, Alibaba will compensate the consumers first. Michael Evans, president of Alibaba Group Holdings, said at the IACC conference on May 19 that in 2015 Alibaba froze about $72 million in funds of the sellers who sold fake products, and refunded $12 million to the consumers that purchased fake goods.

In April 2015, Alibaba cooperated with local governments to launch a new project supporting domestic original equipment manufacturers building their own brands. Till now there are 135 key industrial sectors and more than 5,000 enterprises selling more than 40 million yuan on average every day.

But Alibaba's efforts in fighting against fake goods do not satisfy the IACC because it cannot totally eliminate fake products on the platforms. Consumers' demand, profit chains behind the fake goods and the business mode of e-commerce platform make this very difficult.

Fake goods are the cancer of social and economic development, but to some extent it is also the inevitable phenomenon in the transition to a market economy. Developed counties like Japan and South Korea have all experienced such periods. The history of fake goods is much longer than that of e-commerce.

Whether we could eliminate fake goods depends on a country's level of economic development and rule of law, as well as people's morality and civility. It is far beyond the capacity of a single company.

Objectively speaking, no matter how much effort Alibaba makes, it cannot completely eliminate fake goods on its platforms in the short term. It's somewhat unfair that IACC has suspended Alibaba's membership, which denied Alibaba's efforts in cooperating with international organizations and brands to effectively fight against fake goods.

The decision that IACC made reflects ingrained bias and prejudice against China. Alibaba's attitude toward this decision is commendable: Whether there's IACC or not, Alibaba will continue to crack down on fake goods.

The author is a professor at the School of International Trade and Economics, University of International Business and Economics, Beijing.