On February 17, the United States Trade Representative (USTR) listed Alibaba-owned AliExpress and Tencent-operated WeChat, along with Weixin, which is the China-specific version of WeChat, in the Notorious Market List (NML). This was part of the finding released in the USTR’s 2021 Review of Notorious Markets for Counterfeiting and Piracy. The list also has the domestic B2B marketplace, IndiaMART.
What is the Notorious Market List?
The USTR’s Notorious Markets List (NML) enumerates online and physical markets reportedly involved in facilitating, neglecting or benefitting from sale of counterfeit products or copyright piracy and violations. The report’s ‘Positive Development’ section mentions the actions that governments and private entities have taken in the past one year to combat piracy and counterfeiting.
The current report identifies 42 online markets and 35 physical markets as being in violation of anti-piracy and anti-counterfeit practices.
AliExpress and WeChat are the latest entrants, with China-based Baidu Wangpan, DHGate and Taobao continuing to remain in the list. The list also contains nine physical markets within China known for manufacture, distribution and sale of counterfeit goods.
Is this the only report?
The NML report states that it neither makes findings legal violations nor is it the U.S. Govt’s official scrutiny pertaining to IP protection and enforcement. The official scrutiny is carried out in the Congressionally-mandated annual Special 301 Report published towards the end of April. The publishing of the Special 301 Report is undertaken pursuant to Section 182 of the Trade Act of 1974.
The two reports, initially published as a single report, were segregated in 2010.
The Special 301 Report places countries on ‘Priority Watch List’ and the ‘Watch List’. India along with Argentina, Chile, China, Russia, Saudi Arabia, Venezuela and Ukraine were on the ‘Priority Watch List’ in the 2021 review. As per information on the USTR website, the review and resulting report is used to focus engagement on these issues. Further, it seeks cooperation with trading partners, listed in the report, to improve the ecosystem for authors, brand owners and inventors globally.
Why AliExpress, WeChat and IndiaMART?
AliExpress: The report states that rights holders have complained of a significant increase in the sale of counterfeit goods on the platform. Sellers of counterfeit goods too have risen significantly, the report adds. Even though sellers on the platform are required to furnish a business license, a satisfactory vetting mechanism is lacking.
NML attributes the continuing prevalence of sellers of counterfeit goods purportedly in part to the lenient seller penalty system and the eviction process.
WeChat: The platform’s e-commerce ecosystem is accused of “seamlessly” facilitating distribution and sale of counterfeit products. Like AliExpress, the platform too is said to be lacking a vetting mechanism. Rights holders informed the NML that counterfeit product sellers are able to easily set up their own Official Accounts and Mini Programs. Further, they identified instances where sellers, dismissed for providing fraudulent information, were reinstated. This, even as obtaining exclusion remains cumbersome.
Rights holders also complained of the platform not permitting registered brands to search or monitor information available to all users pertaining to sale of counterfeit goods.
IndiaMart: NML states counterfeit products can be bought in large volumes on the platform, including counterfeit pharmaceuticals, electronics, and apparel. They are accused of inadequate implementation of anti-counterfeiting practices, seller verification mechanism as well as not being proactive in imposing penalties against known sellers of counterfeit goods.
Its notice-and-takedown system is cumbersome. The status of complaints is also not transparently communicated to right holders, the report states.
Does the NML report mention anything else about India?
Yes, the report lists Heera Panna in Mumbai, Kidderpore in Kolkata and Palika Bazaar and Tank Road in Delhi as physical markets carrying out sale of counterfeit goods.
Heera Panna is accused of facilitating sales of counterfeit watches, footwear, accessories and cosmetics. Further, as per the report, Kidderpore allegedly sells counterfeit apparel and cosmetics in wholesale quantities.
Palika Bazar continued to remain on the list with the “underground market in Delhi seemingly well known” for sale of counterfeit mobile accessories, cosmetics, watches and eyewear. The report points out that it is particularly popular among students and young people.
