The Chinese State Administration for Industry and Commerce (SAIC) has reprimanded Chinese Alibaba because one of its online marketplaces, Taobao, has too many counterfeit products for sale. Alibaba disagrees and has launched a counter-offensive.
Only 40 % is real
According to a Chinese report, only 40 % of Taobao's product range is not counterfeit and that is why the Chinese authorities have now pointed the finger at Alibaba. They feel the company should do more checks to verify that the products are in fact genuine.
The report dates back to July, but was carefully concealed until the company's American IPO had passed, seeing how the SAIC had no intention of scuppering the IPO. Up until a few years ago, Alibaba even featured on an American list of "notorious markets", known for breaking the law when it came to counterfeit products.
Alibaba has now revealed it will file a complaint against SAIC, because it feels the State Administration is abusing its power and that it has damaged Taobao's reputation.