Anti-Counterfeiting Group Suspends Alibaba’s Membership

Alibaba Group has been suspended by an anti-counterfeiting group after several of its members complained about Alibaba’s history of piracy-filled marketplaces. The International Anti-Counterfeiting Coalition (IACC) made the decision following a report by The Associated Press which found the coalition’s president had several conflicts of interest when admitting Alibaba into the organization.

IACC President Robert Barchiesi had ownership of Alibaba stock, had close ties to an Alibaba executive and recruited family members to help run the IACC, says The Associated Press. After the story broke on May 13, the coalition sent a letter to members explaining that the conflicts of interest weren’t previously disclosed “because of a weakness in our corporate governance procedures.” That same day, Alibaba's shares were down 2.5%.

Several members quit the coalition after Alibaba was accepted including Tiffany & Co., Gucci and Michael Kors. Alibaba has drawn the ire of top luxury brands and large trade groups (including the American Apparel and Footwear Association) for the availability of counterfeit goods on its e-commerce marketplaces. Last year, Alibaba instituted new anti-counterfeiting measures but still had to lobby the U.S. government to stay off its black market list. A survey last year from China’s commerce regulator that found nearly two-thirds of the goods sold on Alibaba’s Taobao online marketplace were fakes.

The IACC has over 250 members, including Apple, Cisco Systems and Chanel. According to the organization’s website, Alibaba founder Jack Ma is scheduled to speak at an IACC event next week.