INTERNET: Alibaba Ratches Up Anti-Piracy Noise
Bottom line: Alibaba will mount an intense campaign in Washington over the next 6 months in a bid to avoid major embarrassment if its name appears on a widely watched list of global Internet companies that don’t do enough to fight piracy.
Just weeks after hiring a major lobbyist to convince Washington it’s serious about fighting piracy, e-commerce leader Alibaba (NYSE: BABA) is turning up the volume in its campaign with a couple of new announcements about its commitment to combating the problem. The latest of those has seen Alibaba jointly issue an announcement with the Washington-based International AntiCounterfeiting Coalition, reaffirming an earlier tie-up aimed at stamping out the selling of fake products in Alibaba’s popular e-commerce marketplaces.
The other announcement came earlier in the week, and saw Alibaba announce it was strengthening its cooperation with a Chinese organization that fights online copyright infringement. Unfortunately for Alibaba, no one paid too much attention to these 2 announcements, with the result that its renewed anti-piracy blitz wasn’t publicized too much in mainstream media.
Regular readers will know I’m being just a little cynical in that last comment, since Alibaba’s high-profile announcements are at least partly aimed at convincing Washington that it’s serious about battling piracy. The company successfully convinced officials at the US Trade Representative’s Office on that issue 3 years ago after an intensive lobbying campaign, which resulted in the removal of Alibaba’s name from an annual Washington list of “notorious” piracy websites.
But much has changed since that campaign. On the positive side, Alibaba jumped into the record books last fall when it made a $25 billion New York IPO — the biggest of all time. But earlier this year the company was at the center of a major scandal, after one of China’s main commerce regulators released a report saying nearly two-thirds of the goods traded on its popular Taobao marketplace were fakes.
Alibaba’s name remained absent from the latest “notorious” list that was released in Washington earlier this year, but it’s clearly quite worried that its name could appear on the next edition due to revelations from China’s State Administration for Industry and Commerce. That backdrop provides suitable context for these 2 new announcements about Alibaba’s renewed commitment to fighting piracy.
Alibaba issued the first of those earlier this week, when it said it had signed a memorandum of understanding (MOU) to increase its collaboration with the International Publishers Copyright Protection Coalition in China (IPCC). (company announcement) The 2 sides previously signed an agreement in 2011 when Alibaba was working to have its name removed from the “notorious” list, and they said their new announcement marks a broadening of that alliance.
The second announcement looks very similar, and involves an earlier alliance between Alibaba and the US-based International AntiCounterfeiting Coalition. (company announcement) In this instance the 2 sides signed an earlier MOU in 2013, and this latest announcement says they have just agreed to evaluate progress since they signed that original agreement.
I’m sure Alibaba is really planning to step up its anti-piracy actions following the scandal earlier this year. But that said, this pair of announcements is also clearly part of its intense lobbying effort to convince Washington it’s serious about fighting piracy. As part of that campaign, the company earlier this month hired Eric Pelletier, a Washington insider with extensive work experience on Capitol Hill and in the administration of previous President George W. Bush. (previous post)
Quite a lot is at stake in this growing campaign, since a return of Alibaba’s name to the “notorious” list would have big repercussions. Such a move would be a huge embarrassment for Alibaba, and would probably spark a sell-off for its stock that could wipe off billions of dollars from its market value. I’m far too timid to predict whether Alibaba will ultimately succeed in its campaign, and instead will only say that all eyes will be watching very closely for release of the next “notorious” list, probably sometime in the first quarter of next year.
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