In the news: Baidu deals with paid advertising crisis, Gucci leaves anti-counterfeiting coalition after Alibaba joins and the PBOC expands interbank bond market access

Gucci quits anti-counterfeiting group after Alibaba joins

Gucci America has quit the International Anti-Counterfeiting Coalition (IACC), marking the second defection since the group allowed Alibaba to become a member in April. It follows after Michael Kors walked out of the IACC last month—the brand's general counsel called the Chinese e-commerce giant “our most dangerous and damaging adversary”. Gucci, along with other Kering Group brands including Balenciaga, is suing Alibaba in a New York federal court, accusing Alibaba of knowingly encouraging and profiting from the sale of counterfeit goods on its e-commerce platforms. Alibaba said the suit was “wasteful litigation”. The IACC has over 250 members, including Apple, Cisco and Chanel. Alibaba said its membership will allow for closer cooperation with brands to protect IP rights. One Shanghai-based IP lawyer China Law & Practice spoke to said that the lack of rules and brand owner protection at the outset had created “one big ugly marketplace”. It's no secret Taobao.com is swarming with fakes but, to Alibaba's credit, the company has made efforts to change its reputation—CEO Jack Ma is very vocal about fighting counterfeit goods and various consumer protection and IP regulations issued over the past few years have cracked down on e-commerce. The company also has dedicated teams that work with brands to remove counterfeit links. In a recent exclusive interview, the Asia legal counsel of GoPro said: “Collaborating with [the IP teams of Alibaba and JD] is extremely effective but it's a lot of work.”

PBOC expands interbank bond market access

The People's Bank of China further broadened the scope of investors in the interbank bond market on May 6, granting direct access to all wealth management products (WMPs), housing provident funds, pension funds and charities. The move is predicted to bring in large amounts of extra capital into the market and increase the transparency of the wealth management industry as all institutional investors can now buy bonds directly instead of working through intermediaries. This privilege was previously limited to only 16 listed banks. China is in a perpetual paradox when it comes to maintaining cashflow in and out of its borders. The strict capital controls prevent too much of its own currency from leaving while it needs foreign money to support its heavily export-driven economy. This move is aimed at increasing some of that inflow as well as boosting foreign investors' confidence in the domestic financial products, many of which are perceived as risky and controversial.

Baidu urges focus on values after paid advertising fiasco

The Cyberspace Administration of China has ordered new measures to protect consumers, following the death of Wei Zexi, a 21-year-old student who sought out a controversial treatment of a rare form of cancer among Baidu's search results. Baidu CEO Robin Li urged his staff to focus on values rather than short-term interests, and the Beijing-based search engine has been required to cap the number of ads per page at 30% after the probe found paid search results misled users. It announced to set up a Rmb1 billion ($154 million) fund for compensating customers defrauded by advertisers as well as a department that will revamp results based on user responses. The regulator also ordered the company to offer clear markers that indicate paid posts and review its medical ads, removing those that don't comply with new standards. Healthcare ads account for 20% to 25% of Baidu's search revenue, according to analysts. They say the move has the potential to hurt a key profit source for the company as advertisers won't be willing to pay as much if their search results will be pushed to the sides. The 2015 Advertising Law has a much broader ambit to enforce against misleading and harmful advertising, and cracks down harder on ISPs, medical/healthcare ads and consumer protection violations than its 20-year-old predecessor. Online platforms must thoroughly check and clean up the ads they disseminate or face civil penalties—Article 56 states: “If a false advertisement for a good or service that has an impact on the lives and health of consumers causes harm to consumers, the advertising agency, advertisement disseminator and advertising spokesperson shall bear joint and several liability with the advertiser.”

Gucci quits anti-counterfeiting group after Alibaba joins

Gucci America has quit the International Anti-Counterfeiting Coalition (IACC), marking the second defection since the group allowed Alibaba to become a member in April. It follows after Michael Kors walked out of the IACC last month—the brand's general counsel called the Chinese e-commerce giant “our most dangerous and damaging adversary”. Gucci, along with other Kering Group brands including Balenciaga, is suing Alibaba in a New York federal court, accusing Alibaba of knowingly encouraging and profiting from the sale of counterfeit goods on its e-commerce platforms. Alibaba said the suit was “wasteful litigation”. The IACC has over 250 members, including Apple, Cisco and Chanel. Alibaba said its membership will allow for closer cooperation with brands to protect IP rights. One Shanghai-based IP lawyer China Law & Practice spoke to said that the lack of rules and brand owner protection at the outset had created “one big ugly marketplace”. It's no secret Taobao.com is swarming with fakes but, to Alibaba's credit, the company has made efforts to change its reputation—CEO Jack Ma is very vocal about fighting counterfeit goods and various consumer protection and IP regulations issued over the past few years have cracked down on e-commerce. The company also has dedicated teams that work with brands to remove counterfeit links. In a recent exclusive interview, the Asia legal counsel of GoPro said: “Collaborating with [the IP teams of Alibaba and JD] is extremely effective but it's a lot of work.”

PBOC expands interbank bond market access

The People's Bank of China further broadened the scope of investors in the interbank bond market on May 6, granting direct access to all wealth management products (WMPs), housing provident funds, pension funds and charities. The move is predicted to bring in large amounts of extra capital into the market and increase the transparency of the wealth management industry as all institutional investors can now buy bonds directly instead of working through intermediaries. This privilege was previously limited to only 16 listed banks. China is in a perpetual paradox when it comes to maintaining cashflow in and out of its borders. The strict capital controls prevent too much of its own currency from leaving while it needs foreign money to support its heavily export-driven economy. This move is aimed at increasing some of that inflow as well as boosting foreign investors' confidence in the domestic financial products, many of which are perceived as risky and controversial.

In the news: Baidu deals with paid advertising crisis, Gucci leaves anti-counterfeiting coalition after Alibaba joins and the PBOC expands interbank bond market access

This premium content is reserved for China Law & Practice Subscribers.

This premium content is reserved for
China Law & Practice Subscribers.