China threatens to ban e-com companies that flout IP laws
China plans to tighten oversight of e-commerce companies like Alibaba Group Holding and Pinduoduo, including by holding them accountable for intellectual property violations.
E-commerce platforms will be restricted from online business operations or even have their licenses revoked if they fail to deal with serious violations of IP rights by vendors on their platforms, according to a draft revision of the country’s e-commerce law posted by the State Administration for Market Regulation. The market watchdog is seeking opinions on the draft revision until October 14.
Chinese companies have long struggled with allegations that they allowed pirated or counterfeit goods to be trafficked through their websites.
In 2019, the US government added PDD to its Notorious Markets list for hosting pirated good, joining Alibaba and other Chinese firms under that label. PDD and Alibaba’s Taobao were also on the 2020 list, released in January.
Merchants “found Pinduoduo’s takedown system to be sometimes unresponsive and slow to remove the identified goods,” the US Trade
Representative’s office said in its report.
PDD has also faced IP issues in China. Shanghai court documents show hundreds of legal challenges against the company over copyright infringement or trademark registrations. Alibaba co-founder Jack Ma once that it was difficult to root out fake goods on the company’s platforms because they were so high QUALITY.BLOOMBERG