In an open letter published on his Sina (SINA) Weibo account, China's Twitter (TWTR) -like service, Alibaba (BABA) founder and Chinese billionaire Jack Ma on Tuesday asked Chinese legislators to penalize counterfeiters with serious jail time and steep fines, the kind of measure that China adopted to crack down on drunk driving.
Ma's plea comes at the the same time as more than 5000 Chinese lawmakers and government officials are convening at the annual plenary sessions of the National People's Congress and the National Committee of the Chinese People's Political Consultative Conference in Beijing.
The meetings, known as the "Two Sessions," often generate decisions that carry broad implications for international business communities.
"The existing laws are lagging, failing to impose actual threats on the behavior of counterfeiters and leave far too much room for cheating. Fighting the war on counterfeits requires not only collaboration among various forces of society, but also a strong legal foundation," wrote Ma.
Anti-counterfeiting efforts have become a priority for Alibaba over the years. The Chinese e-commerce giant has been accused by international brands and trade associations of being lax with fake goods on its e-commerce platforms, in particularly its peer-to-peer shopping site Taobao. The site was also labeled as a "notorious market" by the U.S. Office of the Trade Representative in December last year, just four years after escaping the list that includes file-sharing site Pirate Bay.
Persistent criticism against Ma and Alibaba for having not done enough to stamp out counterfeits and copycats has also been weighing on Alibaba's stock, Ivan Feinseth, Head of Research and Chief Investment Officer, Tigress Financial Partners, suggests.
"It has been weighing on the stock for quite sometime. As an investor in Alibaba, you are going to have to hope that they can create a vetting process for vendors that somehow tries as best as they can to create a level of comfort with buyers," said Feinseth who has a strong "Buy" rating on the Alibaba stock.
Ma's unusual public plea to Chinese authorities signals another step-up in Alibaba's on-going anti-counterfeiting campaign but some experts wonder whether it will lead to anything substantial. Besides Alibaba, major ecommerce platforms such as Amazon.com (AMZN) and eBay (EBAY) have all been of accused of harboring knock-offs.
"Jack Ma has consistently had a public anti-counterfeiting persona that is difficult to reconcile with Alibaba's actions. Counterfeits have exploded on the platform with Alibaba admitting that they removed 380 million listings just from Taobao in 2016. Many of these items had already been sold to consumers before the removal and many were simply relisted," said Craig Crosby, publisher of The Counterfeit Report, a consumer watchdog organization.
In January, Alibaba took its first legal actions against counterfeits. The company filed a lawsuit against two sellers of fake Swarovski watches on its Taobao platform with the Shenzhen Longgang District People's Court, claiming 1.4 million yuan ($201,482) in damages. In Tuesday's open letter, Ma suggests even harsher punishment for manufacturers of fake goods.
"For example, if the penalty for even one fake product manufactured or sold was a seven-day prison sentence, the world would look very different, both in terms of intellectual property enforcement and food and drug safety, as well as our ability to foster innovation," added Ma.