Alibaba Accused of not paying enough Attention to Illegal Business on its Platform

Alibaba Accused of not paying enough Attention to Illegal Business on its Platfo

Chinese e-commerce major Alibaba Group Holding Limited has been accused by the Chinese government of not paying enough attention to illegal business conducted on its platforms and of not taking corrective measures to get rid of it.

According to the State Administration for Industry and Commerce (SAIC), various products that Alibaba sold on its e-commerce websites and through its services had infringed upon trademarks, were unlawfully imported and were substandard.

Alibaba has not given any instant comment regarding the report. The report summarized a meeting that was held between government business regulators and Alibaba on July 16, 2014. Stricter standards had been adopted by Alibaba on piracy and fake goods ahead of its record US stock listing last year.

"Illegal business activities on Alibaba Group's platforms have for a long time failed to elicit sufficient attention, and the company for a long time has not adopted effective measures to address the situation", the report said.

According to a report by the State Administration for Industry & Commerce, Alibaba has allowed merchants to run unauthorized stores without necessary business licenses. These unauthorized stores co-opt famous brands and sell fake wine and handbags.

The report mentioned that the credibility crisis Alibaba is currently facing is the biggest since its inception and it has also badly influenced other Internet operators that are making efforts to work lawfully. At the July meeting with SAIC officials, Alibaba had admitted that problems existed on its platform. The group had vowed to improve monitoring efforts and increase communication with regulators.

According to the government, although the meeting was held in July, the report has not yet been published to avoid affecting Alibaba's initial public offering. Li Muzhi, a Hong Kong-based analyst at Arete Research Service LLP, said that various Chinese government agencies may be not too happy with Jack Ma's high profile, his plans in the financial sector and impact on the retail sector.

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