US says China's Baidu, Taobao markets for piracy

[March 01, 2011]  BEIJING (AP) -- The U.S. government has labeled China's top search engine, Baidu, and a popular e-commerce platform "notorious markets" linked to sales of pirated and fake goods.

The two companies were among 33 websites or public markets in China, Russia, India and other countries that the U.S. Trade Representative's office said Monday facilitate trade in music, clothing and other goods that are fake or unauthorized copies.

China is a leading source of fake and counterfeit goods despite repeated government crackdowns. Beijing launched its latest enforcement effort in October and says it hopes to achieve lasting results.

The USTR report said Baidu links to websites that sell pirated or counterfeit goods while outside merchants use Taobao, an e-commerce platform operated by Alibaba Group Ltd., to sell infringing items. It said the list was not a legal finding but an effort to call attention to abuses and encourage governments to stop them.

The outlets cited "exemplify the problem of marketplaces dealing in infringing goods and helping to sustain global piracy and counterfeiting," the report said. "The United States urges the responsible authorities to intensify efforts to combat piracy and counterfeiting in these and similar markets."

The report said Taobao is making "significant efforts" to address piracy but "still has a long way to go in order to resolve those problems."

Alibaba said last month its chief executive and chief operating officers resigned to take responsibility after a probe found suppliers defrauded customers. It said 100 salespeople, out of a work force of 14,000, allegedly involved in defrauding customers were fired.

In a written statement, an Alibaba spokesman, John Spelich, said: "We appreciate the USTR's acknowledgment of our ongoing efforts to work with brand owners in protecting their intellectual property rights and we will continue to work closely with brand owners and others to further enhance the level of trust and integrity in our online marketplaces for the benefit of all our stakeholders."

A Baidu spokesman, Kaiser Kuo, declined to comment.

Other websites cited by the report include Canada-based IsoHunt, Russia-based Rutracker, China's 91.com and Demonoid in Ukraine. It cited public markets in China, Ecuador, Paraguay, Indonesia, Ukraine, India and Argentina.

The report said the economy of a whole city in Paraguay, Ciudad del Este, is "based in part on the trafficking of counterfeit and infringed goods," especially electronics.

"This activity spills over into the entire Tri-Border Region of Paraguay, Argentina and Brazil, creating a hotbed of piracy and counterfeiting," the report said.

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Online:

Baidu.com: http://www.baidu.com/

Taobao (in Chinese): http://www.taobao.com/

[Associated Press; By JOE McDONALD]

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