China wants to hold online stores responsible for intellectual property violations. The Chinese government will thus force Alibaba and Pinduoduo, among others, to take action against traders who sell counterfeit goods on their platform. If the webshops do not do this, then as a last resort, they have to close completely.
The new law of the Chinese regulator is not yet in force. The market watchdog will ask for advice on the proposal until mid-October.
Chinese companies have long struggled with allegations that they allow counterfeit goods to be traded on their websites. The US government maintains a list of online stores that are known for this. Alibaba and Pinduoduo are on that list, among others. Jack Ma, the CEO of Alibaba, once said that it is difficult to keep counterfeit items from the web store because they are of very good quality.
Earlier this month, it was announced that the Chinese government was planning to introduce regulatory legislation in all kinds of areas in the coming years. For example, the National People’s Congress of China, the unelected national parliament, passed a law earlier this month to better protect people’s privacy online.
Beijing has been working for some time to tackle the dominant position of large companies such as Tencent and Alibaba with stricter regulations. Recently, various companies have been tackled due to, among other things, competition violations and the handling of user data.