Chinese e-commerce giant Alibaba has now been subjected to intense criticism by Chinese regulators for allegedly passing the permission for sales of fake goods.
The report by the State Administration for Industry & Commerce accused Alibaba of allowing merchants to operate without required business licenses, to run unauthorized stores that co-opt famous brands and to sell fake wine and handbags. It also said Alibaba allowed illegal advertising that misled consumers with false claims about low prices and other details.
The report further added that Alibaba employees took bribes, and the e-commerce giant didn’t fix flaws in customer feedback or internal credit-scoring systems.
As written in the report-
For a long time, Alibaba hasn’t paid enough attention to the illegal operations on its platforms, and hasn’t effectively addressed the issues. Alibaba not only faces the biggest credibility crisis since its establishment, it also casts a bad influence for other Internet operators trying to operate legally.
The report came out as a result of a meeting in July between regulators and Alibaba Group Ltd. management. It said the release was postponed to avoid affecting progress toward Alibaba’s stock market debut. The company went public in September after raising a record $25 billion in an initial public stock offering.
Alibaba’s services include Taobao, a consumer-to-consumer platform, and Tmall for consumer brands. The two outlets have a total of more than 50,000 merchants.
In December, the company said it had removed 90 million listings for goods that might have violated intellectual property rights. The company said it had spent $161 million from the start of 2013 through late 2014 on blocking counterfeit goods and improving consumer protection.
In January, Alibaba and the U.S. Consumer Product Safety Commission announced an initiative under which the Chinese company will prevent vendors from exporting to the United States goods that are the target of recall orders.