Business News for Feb. 17, 2022

“The global trade in counterfeit and pirated goods undermines critical U.S. innovation and creativity and…

Business News for Feb. 17, 2022
Credit…Pete Marovich for The New York Times

The Biden administration on Thursday added WeChat’s e-commerce ecosystem and AliExpress, an e-commerce site owned by Alibaba, to an annual list of markets that the United States says engage in counterfeiting and copyright violations.

The administration said the activities caused significant financial losses for American businesses and workers and posed risks to consumer safety last year.

The Biden administration also removed from the list several of Amazon’s foreign stores, which the Trump administration had added for the first time to its report released in January last year.

The inclusion of Amazon’s stores in Britain, Canada, France, Germany and India prompted an outcry from the company, which claimed that its inclusion was driven by a “personal vendetta” on behalf of the Trump administration, despite consumer complaints about fake products on the platform.

The new report, released by the Office of the United States Trade Representative, identified 42 online markets and 35 physical markets that sold or eased trade in a wide array of counterfeit or pirated goods, including fake Nike products, pirated books and academic papers, music files and virtual items like video games.

The list included several major Chinese e-commerce businesses, like Taobao, an e-commerce site owned by Alibaba; DHGate, a business-to-business e-commerce platform; and Baidu Wangpan, a cloud storage service that allows users to share pirated movies, TV shows and books.

In a statement, Alibaba said that it looked forward to continuing to work with governments to understand and address concerns about intellectual property protection across its platforms.

“We know the challenges in I.P. protection and remain fully committed to advancing our leadership in this area,” the company said.

A press officer for Tencent, which owns WeChat, said in a statement that the company strongly disagreed with the decision and that it monitored and deterred intellectual property rights violations.

The protection of intellectual property rights “is central to our business,” the statement said. “We take a comprehensive approach, based on industry best practices, to combating counterfeiting and infringement on all of our platforms.”

The office said some countries had made progress in cracking down on the sale of counterfeit goods, including Brazil, the Philippines, Thailand and the United Arab Emirates. It also said it had documented a shift of pirated goods from physical marketplaces to online, in part because the pandemic depressed global tourism.

The report also identified a new ecosystem: “piracy-as-a-service,” in which operators offer website templates, databases of infringed video content or other features that make it easy for customers to set up pirate operations.

“The global trade in counterfeit and pirated goods undermines critical U.S. innovation and creativity and harms American workers,” Katherine Tai, the United States trade representative, said in a statement. “This illicit trade also increases the vulnerability of workers involved in the manufacturing of counterfeit goods to exploitative labor practices, and the counterfeit goods can pose significant risks to the health and safety of consumers and workers around the world.”

The report also examined the impact of counterfeit goods on the people who make them, part of the administration’s focus on how trade affects workers. Because these businesses operate outside the law, counterfeiting and piracy often go hand in hand with unsafe working conditions, child labor, forced labor and other issues, the trade representative’s office said.

“Counterfeit manufacturing often occurs in clandestine work places outside the reach of labor market regulations and inspection systems, which increases the vulnerability of workers to exploitative labor practices,” the report said.

The report will result in no immediate penalties for the named companies, though it said the goal of publishing such a list was to “motivate appropriate action by the private sector and governments.”

Congress is mulling some actions that could clamp down on Chinese e-commerce sales, including counterfeit goods, to the United States as part of a major legislative effort at promoting U.S. economic competitiveness with China.

One provision, proposed by Representative Earl Blumenauer, Democrat of Oregon, would raise the threshold for the dollar value of a good that could come into the United States duty free from certain countries, namely China.

That level, called de minimis, is set at $800 in the United States. That’s far above the level in many other countries, a policy that critics say has led to an explosion of imported e-commerce packages, including some unsafe and illicit goods.