U.S. drops China's Taobao from 'Notorious Markets' list

The U.S. has removed China's Taobao sites from its "Notorious Markets" list of major offenders that support piracy and counterfeiting, citing their successful efforts to remove infringing goods from the sites.

Taobao Marketplace and Taobao Mall, part of Chinese e-commerce giant Alibaba Group, are two major online retail companies in the country. The Office of the U.S. Trade Representative (USTR) has repeatedly named Taobao in previous lists of "Notorious Markets", although last year the government agency noted that the Taobao sites were making progress in fighting piracy and counterfeit products.

The vast majority of the infringing goods have been found on Taobao Marketplace, which works by hosting third-party merchants. Total market transactions on the site have been projected to reach 1 trillion yuan (US$160 billion) for 2012.

On Thursday, USTR announced it had taken Taobao off the 2012 list, stating that the companies had worked with intellectual property rights holders and their industry associations to "clean up" the sites. But to stay off the list, the government office has urged the Taobao companies to continue their efforts at addressing the problem, and improve procedures to remove online listings of infringing products.

In reports submitted to the USTR this year, Alibaba Group said that in 2011 the Taobao sites had removed 63 million product listings that allegedly infringed intellectual property rights. This marked a huge increase from 2010, when the Taobao sites only removed 14 million product listings.

In 2011, most of the product listings removed, at over 53 million, were taken down as a result of different measures by Taobao, while another about 9 million were removed because of complaints from intellectual property rights holders.

The Taobao sites have also adopted strict rules to penalize and even ban merchants if repeatedly found selling infringing goods. In June 2011, a Taobao online complaint system was also established to allow intellectual property rights holders to better report infringing goods found on the site. Later in March of this year, an English language version of the complaint system, geared for small and medium businesses, was created.

"We would like to thank the USTR for the acknowledgment of our efforts," said John Spelich, Alibaba Group vice president of international corporate affairs, in a statement. "The IPR (intellectual property rights) issue is a long march in China, this is a milestone and it is only the beginning."