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USTR: Chinese Anti-Piracy Efforts Wanting

17 Dec, 2015 By: Erik Gruenwedel

E-commerce giant Alibaba remains major facilitator of pirated content, despite inking distribution deals with Disney and other studios

China may be the pending home of Shanghai Disneyland Park, Netflix and myriad studio digital distribution deals, but the communist country also continues to be a hotbed for pirated digital and physical movies.

In the December report from The Office of the United States Trade Representative (USTR), the trade group lauded the effect increased regulatory efforts against illegal websites operating in Brazil, Vietnam, Russia, Uruguay, Canada, New Zealand and Europe had on the availability of counterfeit content.

“The U.S. commends these efforts, and encourages governments, rights holders, and the owners and operators of these and other markets … to engage in sustained and meaningful efforts to combat piracy and counterfeiting,” read the report.

Notably absent from the honor roll was China. Despite Beijing’s pledge to up anti-piracy efforts, illegal distribution of online and physical movies, music, books and video games continues  — much of it facilitated by e-commerce giant Alibaba.

The same Alibaba The Walt Disney Co. just announced it had secured a deal with to begin distributing subscription streaming service DisneyLife in China. Alibaba, whose leader, Jack Ma, is reportedly the second-richest person in China, has also been a major investor in Hollywood movies, including Paramount Pictures’ Mission: Impossible — Rogue Nation.

Specifically, the USTR cited Alibaba, in addition to various subsidiaries, for enabling the selling of pirated content. Alibaba claims it has instituted internal safeguards, including a good-faith product takedown procedure, a three strikes penalty system and related systems to mitigate counterfeit e-commerce.

“It is unclear what effect these procedures are having on the overall prevalence of counterfeit products on the Alibaba platforms, notably Taobao.com,” the USTR said.

The trade group claims Alibaba’s safeguards are too slow and cumbersome to be effective, in addition to lacking transparency. Perhaps bowing to commercial interests, the USTR said it would keep Alibaba and related sites off its list of "notorius markets" problem websites provided the platform instigates changes.

“Given the size and scale of Alibaba’s platforms, stronger and more efficient systems for addressing [content] rights holders’ concerns should be undertaken without delay,” read the report.

Despite receiving fewer complaints regarding distribution of counterfeit DVD movies, due in part to changing market dynamics, China remains ground zero for physical piracy, in addition to Turkey, the United Arab Emirates, Kuwait, Vietnam and Spain.

The trade group said China has adopted policies and procedures to subvert availability of counterfeit merchandise, but the policies are not widely adopted and enforcement remains inconsistent.

“A number of online markets in China have been the subject of deterrent enforcement actions in China’s courts and at least one market is exploring ways to investigate counterfeiting and piracy operation offline,” the USTR reported.

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