BEIJING (AP) – For years, Alibaba faced complaints it failed to stamp out sales of counterfeit goods on its e-commerce websites. But Chinese regulators stayed silent, apparently reluctant to disrupt the rise of an Internet star even as they accused foreign automakers, dairies and others of violating anti-monopoly or consumer protection rules.
That honeymoon ended this week. In a stinging report, a Cabinet agency accused Alibaba Group Ltd. of allowing sales of fake goods and hurting consumers. It was a warning that Alibaba and other private Chinese companies face tougher scrutiny at a time when they are moving into new markets from retailing to banking to taxi hailing.
Given the company’s expanding role in China’s state-dominated economy, “It’s not a surprise that Alibaba finds itself under the spotlight in much the same way that many foreign firms have,” said analyst Ben Cavender of the China Market Research Group in Shanghai.
Alibaba’s high profile as one of China’s biggest private companies brought widespread attention to its run-in with the State Administration of Industry and Commerce. But a series of companies have come under pressure as Beijing tones down its longtime strategy of growth at all costs and shifts to emphasizing protection for workers, consumers and the environment.
Foreign automakers and milk suppliers were hit with fines in 2013 and last year after regulators said they violated anti-monopoly rules. State TV accused Apple Inc. of treating customers unfairly.