The gloves came off in June when eBay told shareholders its Chinese competitor Alibaba had a counterfeit-goods problem, and now eBay and Alibaba are trading full body blows. Last week Yahoo announced it was acquiring a 40 percent stake in Alibaba for 1 billion dollars. Yesterday, Forbes ran an article pointing out Alibaba's challenges with counterfeit goods, downplaying eBay's same challenges (http://digbig.com/4efxb).
The Forbes article said Alibaba is more of a concern because of its B2B focus. But in June, eBay announced a marketing deal with Asian company Global Sources to create its own B2B marketplace (http://www.auctionbytes.com/cab/abn/y05/m06/i16/s01). eBay's own PowerSellers source goods from Alibaba.com to resell on the eBay site, and eBay allowed Alibaba to book a booth at its annual conference in June.
Things heated up, and at the last minute, eBay pulled the magic carpet out from under Alibaba, forbidding it to exhibit at the show. eBay CEO Meg Whitman added insult to injury when she raised the issue of counterfeit goods on Alibaba at the annual eBay shareholders meeting held the first day of eBay Live.
Now Forbes reports a committee of the U.S. House of Representatives has Alibaba and its partnership with Yahoo on its radar screen.
eBay itself faces a lawsuit from Tiffany over the problem of counterfeit goods. It's interesting to note that Tiffany belongs to the group mentioned in the Forbes article, the AntiCounterfeiting Coalition which "berated Alibaba," but so does Ford Motor Company, whose Chairman now sits on the eBay board.
It will take more than finger-pointing, legal maneuvering and PR tactics to solve the very real problem of counterfeit goods on all online auction sites. If the U.S. legislature is concerned about counterfeit goods from China, it can't possibly ignore all of the players involved. Not if it has the concerns of consumers, not big business, in mind.
