Alibaba has been suspended from the world’s largest nonprofit anti-counterfeit organization after a conflict of interest was discovered involving the group’s president, as well as several complaints from brands who also had memberships with the group.
Alibaba joined the International AntiCounterfeiting Coalition (IACC) last month under a new category which permits ‘intermediaries’ to join the group.
Several luxury brands, including Gucci, Michael Kors and high-end jeweler Tiffany & Co., have since withdrawn their membership in protest, claiming that Alibaba has not done enough to rid their e-commerce platforms of counterfeit products.
On Friday an Associated Press investigation revealed that President Bob Barchiesi owned shares in Alibaba, and had close ties to an executive at the Chinese company. According to the IACC board, Alibaba’s membership has now been suspended pending an investigation into the group’s “corporate governance procedures.”
The anti-counterfeit group says that while Mr. Barchiesi did disclose his conflicts, they were not communicated to the board. IACC says they are now hiring an independent investigative body to examine the issue.
In the meantime, Alibaba, along with two other companies that joined under the new membership category, Wish.com and TheRealReal, have been suspended indefinitely.
Alibaba has made aggressive strides toward ridding their platforms of counterfeit products, as they seek to attract more international brands to their platforms, including members of IACC. In a partnership dating back to 2013 Alibaba has worked with IACC to remove over 5,000 sellers as part of a wide-scale anti-counterfeiting push.
Among other measures the e-commerce giant also introduced an English-language complaints channel on their TaoBao Protect anti-fakes feedback system, as well as hiring an ex-Apple investigator to head up the company’s new anti counterfeiting push.
Despite the new measures, Alibaba still struggles to meet international standards on anti-counterfeiting. In December last year the company narrowly avoided being included on an annual blacklist by the U.S. Trade Representative (USTR) which identifies companies who do not meet international anti-counterfeit regulations. The USTR said they were “increasingly concerned” about the status of Alibaba’s enforcement programs.