Bloomberg News

Alibaba Hires Ex-U.S. Official to Aid Washington Lobbying

April 17, 2012

Alibaba Group Holding Ltd. hired former U.S. official James Mendenhall as China’s biggest e- commerce company steps up an appeal to Washington to remove its Taobao site from a list of “notorious markets” for piracy.

Mendenhall will represent Alibaba in talks with the U.S. government and industry groups over intellectual property rights protection, John Spelich, a Hong Kong-based spokesman at the Chinese Internet company, said in an e-mail today. Mendenhall is a counsel at the Washington DC office of Sidley Austin LLP, according to the law firm’s website.

Taobao, China’s biggest shopping website, was among more than 30 online and physical markets worldwide identified in a U.S. Trade Representative Office report in December for helping the illegal sale of pirated and counterfeit goods. The hiring of Mendenhall, a general counsel for the USTR under the George W. Bush administration, came after Alibaba contracted Washington lobbying firm Duberstein Group Inc. last year.

Mendenhall and Duberstein are helping in Alibaba’s talks with U.S. industry groups, including the Recording Industry Association of America and the Motion Picture Association of America, Spelich said.

“We are having good discussions,” Spelich said. “It’s an exchange: here’s what we have done, here’s what we are working on, and let’s get some feedback about the kind of thing you are interested in seeing.”

E-Commerce Units

Yahoo! Inc. (YHOO:US), the biggest U.S. portal, is the largest shareholder in closely held Alibaba Group, based in Hangzhou, east China, with a stake of about 40 percent. Alibaba runs e- commerce units including Taobao, the Alibaba.com site for business owners, and the Juhuasuan coupons site.

“We have been talking to their counsel about steps that Taobao could take to reduce its role as a hub for the distribution of infringing content,” Cara Duckworth Weiblinger, a spokeswoman at the Recording Industry Association in Washington, said by e-mail. “We are hopeful that Taobao will soon take actions that will be effective and deterrent.”

The Motion Picture Association had recent talks with Alibaba, Washington-based spokesman Howard Gantman said, also by e-mail.

Taobao employs about 200 people in its Information Safety department, which aims to stop sales of infringing products, Spelich wrote in a Feb. 10 letter to the USTR. Offending merchandize will be removed from the site, and vendors may be banned, according to the letter. Taobao had removed 63 million infringing product listings by the end of last year, it said.

In 2011, Taobao signed intellectual property protection agreements with luggage maker Samsonite International SA (1910), and luxury-leather goods maker Coach Inc., Alibaba said.

Tmall.com, ETao

Spelich said Alibaba plans to make further submissions to the U.S. government later this year, after its exchanges with industry groups.

In June 2011, Alibaba reorganized Taobao into three divisions. The online shopping unit now comprises Taobao Marketplace, which lets sellers list products for free; Tmall.com, where fees are charged, and ETao, an online-shopping oriented search-engine.

Alibaba targets to increase the value of transactions on Taobao to 1 trillion yuan ($159 billion) this year, founder Jack Ma said in September. In 2010, Taobao had about 400 billion yuan of transactions, Alibaba said.

To contact the reporter on this story: Mark Lee in Hong Kong at wlee37@bloomberg.net

To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net


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