China is cracking down on e-commerce intellectual property infringement — aka counterfeiting — by enforcing its 2019 E-commerce Act.
Snapshot of China’s E-Commerce Landscape
With more than 670 million Internet users (twice as many as the United States), China’s e-commerce sector is skyrocketing. In 2016, the country’s online shopping sales exceeded US$900 billion, and it’s been on the rise ever since.
The biggest player in Asia’s e-commerce market is the Alibaba Group — aka the Amazon.com of China. Unfortunately, the online marketplace is notorious for carrying counterfeit goods, which has affected consumers and sellers worldwide.
China Is Cracking Down on E-commerce Fraud and Counterfeiting
Over the past several years, China has overhauled its e-commerce regulations. First, in 2018, it created the State Administration for Market Supervision (SAMR), a government agency responsible for regulating market competition, monopolies, and intellectual property.
Then, in 2019, China enacted the E-commerce Act — which holds operators and merchants equally responsible for violations — to combat counterfeit merchandising. The law requires online sellers to register with the government. It also establishes an e-payment tax and includes intellectual property provisions.
In 2020, SAMR cited Alibaba for fraudulent marketing and other abusive business practices, like forcing customers to choose between its two e-commerce platforms.
In 2021, SAMR slapped Alibaba with a US$2.8 billion fine, directed it to stop its anti-competitive practices, and ordered the company to file compliance reports for three years.
Alibaba Counterfeit Update: 17% Violation Rate
Recently, SAMR reviewed 660 batches of products produced by 623 companies. Examiners concluded that 17% of the products violated standards, and the sellers were ordered to cease production.
Connect With an International E-commerce Counterfeit Lawyer
Need help with an international e-commerce counterfeit issue? The Kelly Law Firm has worked with countless businesses on cross-border intellectual property matters. Get in touch today.
