No more knock-offs: China threatens to ban retailers selling fake goods

China has threatened to punish or even ban online retailers who sell fake and counterfeit goods amid another major crackdown on the country’s tech giants.

Alibaba, Pinduoduo and other major Chinese ecommerce companies have been accused of allowing counterfeit goods to flourish on their platforms for years, with both featuring on the US government’s ‘Notorious Markets’ list last year.

The State Administration for Market Regulation (SAMR), China’s market watchdog responsible for the recent spate of regulatory crackdowns, has revealed proposals to amend the country’s ecommerce laws.

Under the new proposals the SAMR has threatened to revoke the online business licences, required to sell anything online in China, of retailers found to be in breach of violations of intellectual property laws.

READ MORE: China tightens screw on Big Tech with new data protection law

According to Bloomberg Intelligence analysts, this new legislation could lead to higher prices for shoppers due to the higher expenses associated with authenticating the millions of products for sale on China’s giant ecommerce platforms.

It is the latest in a string of major crackdowns on the Chinese ecommerce industry over the past year as Beijing seeks to limit the economic and political clout of its biggest retail and tech players.

The original ecommerce law, which the proposals are seeking to update, were imposed in 2019 and were designed to clean up China’s reputation as the go-to market for designer knock-offs.

Under the law, retailers such as Alibaba and Pinduoduo can be fined up to 2 million yuan ($300,000) for serious cases of intellectual property infringement.

Alibaba’s co-founder Jack Ma once said: “The problem is that the fake products today, they make better quality, better prices than the real products, the real names.”

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