China has planned to tighten the supervision of e-commerce companies such as the Internet giant Alibaba Group and the online retailer Pinduoduo, which will be another blow to local businesses after the state’s decisions. Companies will be held accountable for violating intellectual property rights, Bloomberg reports, citing a new law issued by the State Administration for Market Regulation.
The main companies that fall under the new law are Alibaba Group and Pinduoduo. If companies fail to cope with serious violations of intellectual property rights by their suppliers, the companies ‘ electronic operations may be restricted, and they may also lose their licenses.
Pinduoduo was included in the US list of Notorious Markets (“notorious markets”, that is, markets where copyrights are regularly violated) for selling pirated and counterfeit goods. This list also includes Taobao (the marketplace launched by Alibaba Group). Chinese companies have been fighting against the US charges for a long time, but Pinduoduo and Taobao were re-included in the list of Notorious Markets.
Pinduoduo has problems with intellectual property rights not only in the United States but also in China. Documents from the Shanghai courts indicate hundreds of lawsuits against the company in connection with copyright infringement or trademark registration.
Alibaba Group co-founder Jack Ma drew attention to how difficult it is for the company to get rid of fakes and counterfeit goods because their quality and prices are often better than products with labels and confirmed trademarks.
The markets included in the list of Notorious Markets participate in or contribute to trademark counterfeiting and copyright piracy. There is no penalty for inclusion in the list, but this list is used to encourage foreign companies and countries to fight piracy and counterfeiting. China has become one of the countries where this struggle is just unfolding.
Beijing also intends to follow the path of tightening legislation in the antimonopoly sphere. The corresponding intentions have already been supported by Chinese President Xi Jinping, Bloomberg wrote. Earlier, the strengthening of antitrust regulation, the importance of which he noted separately, has already led to pressure on tech giants and in the last year cost companies huge losses.