IP Peer Pressure: Alibaba’s Ban on Optical Discs

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Chinese B2B behemoth Alibaba made a lot of people in Hollywood happy with this announcement:

Effective immediately, Alibaba.com and AliExpress.com have instituted a prohibition on the posting of optical discs with audio-visual content.  We take this decision recognizing that the vast majority of distributors of this type of material have their own international distribution channels or authorized resellers, and that our experience is that many listings in the past have proven to infringe on IP rights of others.

Sounds dramatic, coming from a country that is continuously held up as an intellectual property rights enforcement bad boy. Alibaba has certainly had its share of problems in the past with a wide range of counterfeit products and works that infringed on third party copyrights.

Industry reaction was positive, as you might expect. Here’s what Chris Dodd, the new head of the Motion Picture Association, had to say:

This initiative is a bold and positive step in protecting the livelihoods of millions of people in filmmaking communities across the globe. They have recognized that all of us have a shared responsibility to deter these criminals who seek to live off the hard work and passion of others by selling counterfeit products[.]

Yes, a very positive step. But was it ‘bold’? I’m not sure I’d go that far.

Note that I’m not criticizing either Dodd or Alibaba here. I just see this move on optical discs as a decision that, although it may not have been inevitable, certainly followed along with the general trend among Chinese Internet firms.

That trend of course is to clean up online IP infringement. As I’ve been discussing for the past couple of years, many of the big Net firms in China have made great strides in eradicating copyright infringement.

Look at the video file sharing sites Tudou and Youku. I wrote back in January about how their new business models, which include licensing deals with content owners, coupled with outside pressure due to being publicly listed (or soon to be) pushed them to remove a wide range of infringing content.

More recently, we’ve had Baidu cleaning up its act with respect to ebooks (although negotiations with authors remain unresolved) and MP3 downloads. This culminated in Baidu’s unveiling of Baidu Ting, a licensed music service.

For its part, Alibaba and sister e-commerce site Taobao put together “notice and removal” policies quite a while ago, promising to de-list offers for infringing products. As eBay learned long ago, this is quite a challenge for sites that have huge traffic volumes.

So there’s already a lot of history here in the China Net sphere when it comes to dealing with IP infringement. I’m not suggesting of course that all these guys are squeaky clean, but it’s undeniable that many of the larger players have been making significant progress on the IP front for several years now.

So was this move on optical discs ‘bold’? Was Alibaba being a trailblazer? Not at all. Looking at the larger trend with Chinese Net firms, and noting that foreign firms Yahoo and Softbank own significant percentages in Alibaba, this was not a surprising move at all.

If only all mentions of Alibaba in the news could be this positive!

One response on “IP Peer Pressure: Alibaba’s Ban on Optical Discs

  1. Stan Post author

    The following comment to this post was sent to me by John Spelich, VP – International Corporate Affairs at Alibaba.

    “Thanks for taking note of the news of our optical disc ban.

    I just wanted to point out that perhaps you’ve come into our version of the IP protection game in the later innings without knowing the game started earlier, because you seem to suggest we did this after other companies made similar moves.

    We’ve been working with the MPAA for more than two years to figure out better ways to protect IP on our sourcing site, and as a result the MPAA has acknowledged our strong practices and philosophy toward this to the USTR and others. This step was an evolution of that work that we both think will go a long way toward helping the issue.

    Perhaps our work over the past few years, while done quietly behind the scenes and not widely touted for PR effect, resulted in Alibaba.com not even being mentioned in the most recent USTR Special 301 “Notorious Markets” report in late April.

    See report here: http://www.ustr.gov/webfm_send/2841

    In addition, you may care to note that that same special report above, the USTR in April also cited Taobao as an example of a website others should emulate in the work that is being done on IP protection there.

    You are correct. It is far from easy, but it’s worth doing and we have been working on it a very long time and in many different ways, and we will continue to do so.”