TIF Tiffany and Co

China's Internet giant, Alibaba Group Holding Ltd., is promising wholesale changes to how it tackles fake branded goods on its shopping platforms amid controversy over its admission to an anticounterfeiting group and ahead of a looming crackdown on e-commerce knockoffs by Chinese authorities.

The new measures include quicker removal of infringing listings, according to Alibaba. In addition, Alibaba says it will now shift the burden of proof to sellers on its platforms to show that their goods are authentic.

Alibaba's China marketplaces handled $485 billion in merchandise volume in the financial year ended March 31, which analysts estimate is more than Amazon and eBay combined. But it has long been dogged by complaints from brands that its sites are rife with fakes, which drive customer traffic that in turn could profit Alibaba.

Controversy flared over Alibaba's admission last month to the International AntiCounterfeiting Coalition, one of the world's largest groups dedicated to fighting fake and pirated goods.

U.S. fashion brand Michael Kors Holdings Ltd. and Gucci America, Inc., the latter owned by France's Kering SA, withdrew from the Washington, D.C.-based trade group because of concern over Alibaba's commitment to fighting counterfeits, according to people familiar with the matter. Both companies declined to comment.

Tiffany & Co. quit the IACC this week but it didn't say why it left. The U.S. jeweler didn't respond to queries.

French luxury brand Longchamp has told the IACC that it will not attend the group's annual conference next week, where Alibaba's co-founder Jack Ma is the keynote speaker, and that withdrawing its membership "might become an option" if IACC continues to affiliate with Alibaba without consulting its members, according to a letter to the anticounterfeiting group reviewed by The Wall Street Journal.

An Alibaba spokeswoman declined to comment on the departure of the brands from the anticounterfeiting group.

Michael Evans, Alibaba's president, said in a blog post Thursday that the company is "part of the solution, and we will continue to cooperate with brands and industry associations, rather than resorting to unproductive tactics" to fight counterfeits.

The IACC has previously said that its board—including Tiffany & Co.— voted unanimously in favor of admitting Alibaba as the first member of a newly created category for intermediaries and that it "stands by its decision" because marketplaces must be part of the effort to combat fakes online.

In a statement Wednesday, the IACC didn't comment on the jeweler's withdrawal but said it plans to "review all of our policies and procedures to confirm that they meet the highest standards and that our corporate governance fits the size and scope of the IACC we have become."

China's State Administration for Industry and Commerce is about to begin a campaign this month to step up policing of e-commerce sites, according to a report in the state-run People's Daily newspaper. The regulator said that it would severely punish those who violate regulations governing fake or shoddy goods and fictitious sales online by merchants seeking to increase their visibility on e-commerce platforms.

Chinese e-commerce companies including Alibaba and its biggest rival, JD.com, may get more regulatory scrutiny because of their size, according to Duncan Clark, the author of " Alibaba: The House that Jack Ma Built."

Alibaba said the company welcomes measures that promote a "healthy environment for e-commerce development." JD.com said it isn't worried about the scrutiny because it doesn't have a consumer-to-consumer marketplace, an online space where it said counterfeits dominate.

As part of its new efforts against piracy, Alibaba and the IACC this week announced they would expand their joint program to remove counterfeits quickly from the Chinese e-commerce company's sites, including Taobao and Tmall. The program, MarketSafe, will now be open to all brands, free of charge. Previously, it was only available to members of the anticounterfeiting coalition, and cost thousands of dollars a year.

Separately, Alibaba also plans to filter listings that could be for counterfeit goods and send them to brand owners for verification, according to people familiar with the plan. Brands may still have to file a request for Alibaba to take down the listings, however, people familiar with the matter said.

Meanwhile, Alibaba has publicly notified sellers of luxury goods on Taobao, a virtual bazaar where almost anyone can open up a storefront, that starting May 20 they will need to upload proof such as an invoice or letter of authorization to sell branded goods.

Mr. Clark, the author, said Alibaba's latest measures could be some of the "most significant" moves the e-commerce giant has taken so far to tackle the problem, but said it remains to be seen how they're implemented, a view echoed by others.

Dean Arnold, a co-founder of The Intellectual Property Group, which advises more than 20 brands, said, "Previous Alibaba initiatives have sounded great on paper too, but eventually fallen short."

Alibaba has said that its efforts are making a dent on counterfeit sales on its platforms. The program with the IACC has led to the closure of more than 5,000 online storefronts and removal of over 180,000 infringing product listings over two years, it said.

Some large brands have told the Journal that these numbers pale in comparison to the number of listings and shops they have individually managed to investigate and force Alibaba to remove from its sites over the same period.

Write to Kathy Chu at kathy.chu@wsj.com

(END) Dow Jones Newswires

May 13, 2016 05:45 ET (09:45 GMT)

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