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Alibaba’s Jack Ma blames ‘outdated and unrealistic’ laws for ‘encouraging’ fake products

Alibaba’s founder Jack Ma urged stronger penalties for selling counterfeits Tuesday in an open letter arguing that “outdated and unrealistic” laws and regulations “encourage” selling and making of fake products.

Alibaba has come under fire in recent years for the ease at which knock-off goods are available to consumers on its online Taobao marketplace, which accounts for more than 90 percent of the domestic consumer-to-consumer market.

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Alibaba Chairman Jack Ma speaks on stage during the Tmall 11:11 Global Shopping Festival gala in Shenzhen, in south China’s Guangdong province on November 11, 2016. Photo: AFP/Stringer.

“Outdated and unrealistic” laws and regulations have led to few convictions for counterfeit cases, Ma wrote in a letter on his official social media account.

The lack of strict laws “will only encourage more people to engage in the act of making and selling fakes”, he said, addressing delegates of China’s rubber-stamp legislature, which is gathered in Beijing for its annual parliamentary session.

China’s factories have traditionally churned out products for branded companies at low cost, but with the rise of e-commerce platforms such as Alibaba, they are increasingly finding opportunities to market their own goods directly to consumers online.

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A logo of Alibaba Group is pictured at its headquarters in Hangzhou, Zhejiang province, China, October 14, 2015. Photo: Reuters/Stringer/File photo.

Late last year the office of the US Trade Representative put Alibaba’s massive online sales portal Taobao on its annual blacklist, saying the site was not doing enough to curb sales of fake and pirated goods.

Alibaba later filed a lawsuit against two vendors for allegedly selling counterfeit Swarovski watches.

“Selling and making fakes is by its nature an act of theft. The right and wrong judgement on thieves has been clear for a long time, but the theft of intellectual property rights still lacks common social consensus,” Ma said in the open letter.

He said only a tenth of about 4,500 cases Alibaba reported to the police were prosecuted in 2016.

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Alibaba's Jack Ma blames 'outdated and unrealistic' laws for 'encouraging' fake products