US trade officials have named and shamed Chinese search engine Baidu and e-commerce giant Taobao as "notorious markets" for counterfeit and pirated goods.

The decision may add to calls for legislation giving US courts new authority to block foreign websites that sell pirated goods from operating in the US.

The Chinese IT pair is among more than 30 Internet and physical markets around the world listed Monday by the Office of the US Trade Representative (USTR) in an annual review. Ten of the blacklisted markets are from China.
"Piracy and counterfeiting undermine the innovation and creativity that is vital to our global competitiveness," USTR Ron Kirk said in a press release Monday.

"The review … highlights an opportunity to work together with our trading partners to curb illicit trade and expand legitimate commerce in creative and innovative industries," Kirk said.

Baidu and Taobao acknowledged the listing but refused to provide further comment Tuesday.

A spokesman for Alibaba, the owner of Taobao, John Spelich, said in a written statement, "We will continue to work closely with brand owners and others to further enhance the level of trust and integrity in our online marketplaces for the benefit of all our stake-holders," according to the Wall Street Journal.

USTR said Baidu's online services engaged in "deep linking," providing links to online locations that carry the infringing materials.

Baidu, a Nasdaq-listed search engine, was recently ranked as the most visited site in China, and among the top 10 in the world.

Taobao, one of the world's 15 most visited sites, must still address fundamental problems in allowing access to illegal goods though its website, despite its existing efforts, the USTR said.

A Taobao employee who spoke on condition of anonymity said the company had established a unit staffed around-the-clock to filter fake product information on its website.

However, the monitoring principally relied on an automatic filter and consumer complaints, the source said.
A Global Times report in January found that Taobao had been selling hacked iTunes accounts at prices ranging from 1 yuan to 200 yuan ($29.80).

Fangnaier, a Guangzhou-based underwear manufacturer, sued Taobao and three online shops registered at the website in December for counterfeiting its products, involving more than 4,000 shops on the website, reports say.

Last month, Alibaba's chief executive and chief operating officers resigned over a probe that found evidence of mass defrauding of consumers.

It said 100 salespeople, out of a workforce of 14,000, allegedly involved in defrauding customers, were also fired, the AP reported.

The US Chamber of Commerce advised Congress to pass legislation allowing US courts to block foreign websites that sell pirated or counterfeit goods from operating in the US, according to Reuters.

The Chinese government pledged in January to strengthen efforts to protect online intellectual property rights by promoting the establishment of industry associations and by requiring operating websites to acquire licenses, People's Daily reported.

Some consumers, both domestic and foreign, have argued that the demand for pirated and counterfeit goods remains high due to cheap costs and widespread availability, but experts have rejected this argument as not warranting IPR infringements.

Ren Hucheng, a Beijing-based lawyer specializing in IPR, told the Global Times that leading companies such as Baidu and Taobao should be role models in China.

"They should promote corporate social responsibility, spearhead efforts to create a disciplined and healthy business environment," he said. The awareness of IPR protection among Chinese consumers appears to be insufficient, despite tough anti-piracy measures.

"The legal cost for infringements is very low here. People involved in these fraudulent businesses would earn huge profits before being sued and punished," Ren added.

Yu Mingyang, a professor in brand marketing at Shanghai Jiaotong University, told the Global Times that as Chinese enterprises integrate into the international market, they will have to play ball by global rules.

"The alarm bell has been rung for Chinese companies to pay more attention to their social responsibility. To build up a good reputation, some of them may have to abandon their current business methods, which focus only on profitability," Yu noted, adding that more international accusations toward the accountability of Chinese companies would occur soon.

"It's time for enterprises, consumers and the government to attach more importance to the issue and build a fair and friendly market," Yu said.

Source:Global Times