US Trade Representative names Shopee, Tokopedia and Bukalapak in 2021 Review of Notorious Markets for Counterfeiting and Piracy

The United States Trade Representative (USTR) on 17 February released the 2021 Review of Notorious Markets for Counterfeiting and Piracy or also known as Notorious Markets List (NML). Three e-commerce giants in Indonesia, namely Shopee, Tokopedia and Bukalapak, are included in the list. 

NML highlights prominent and illustrative examples of online and physical markets that reportedly engage in, facilitate, turn a blind eye to, or benefit from substantial piracy or counterfeiting. 

There is no penalty for companies listed in the list, but the review is released in order to  motivate and encourage appropriate action by the private sector and governments to reduce piracy and counterfeiting. 

Through a press release that announces the report’s findings, USTR Ambassador Katherine Tai said that the global trade in counterfeit and pirated goods undermines the critical importance of innovation and creativity in the US and harms American workers. 

“This illicit trade also increases the vulnerability of workers involved in the manufacture of counterfeit goods to exploitative labour practices, and counterfeit goods can pose a significant risk to the health and safety of consumers and workers all over the world,” she stated. 

According to the report, in Indonesia, the said e-commerce companies have been repeating the violations. Sellers of counterfeit goods can still register or sell their goods again on their platforms.

The report reveals that Shopee has a very high level of counterfeit products in almost all its platforms worldwide with the exception of Shopee Taiwan. Right holders also have reported that Shopee’s notice and takedown procedures are burdensome, decentralised, ineffective and slow. 

Shopee also does not create an environment where sellers are deterred from offering counterfeit goods with insufficient penalties for sellers who are doing so. However, the report also said that Shopee has tried to increase its engagement with right holders in an effort to address these issues. 

In response, as reported by Katadata, Shopee representative said they will create more policies and procedures to identify and prevent violations of intellectual property rights on the platform while improving the efficiency and effectiveness of its brand protection initiatives to provide a safe and comfortable shopping experience

Meanwhile, for Bukalapak, the report acknowledges that the company has made several improvements to its anti-counterfeiting systems, such as its seller vetting protocols and takedown processes. 

However, such protocols are not enough to prevent sellers from registering and selling counterfeit products - some items are even often openly labelled as “replicas”. The process to remove counterfeit products in the platform is considered too slow as Bukalapak is not proactive enough in doing so. 

In their response, Bukalapak said that they are cooperating with relevant government institutions and have met the regulatory requirements. Bukalapak cited their BukaBantuan feature where users could report counterfeit products while working together with trusted official brands to sell their products through the BukaMall programme as their countermeasure efforts. 

For Tokopedia, the report finds that it has high rates and volumes of counterfeit clothing, cosmetics and accessories as well as pirated textbooks and other pirated English-language materials. 

Although some rights holders have noticed improvements in Tokopedia’s notice-and-takedown system and its increased engagement with brands to address the issue, others said Tokopedia’s system creates a burden on right holders by requiring unnecessary information. It does not result in the expeditious removal of counterfeit listings whilst not allowing them to track the status or result of their notices. 

The report adds that Tokopedia could also improve its proactive keyword, price and image filtering technology to detect and remove counterfeit listings before they are shown to users.

"Despite the fact that Tokopedia is an UGC platform - meaning, each seller can upload products independently - we will continue to take cooperative actions to keep activities on the Tokopedia platform in accordance with applicable laws,” said Tokopedia External Communications Senior Lead Ekhel Chandra Wijaya, as reported by Tek.id. He added that users can also use the abuse reporting feature to report products that violate the platform usage rules and applicable laws in Indonesia.

The list also includes the infamous Mangga Dua Mall as a physical market in Indonesia that sells a variety of counterfeit goods, including handbags, wallets, children’s items, clothing and fashion accessories, with reportedly minimal law enforcement against those who sell counterfeit goods.

“Indonesia should adopt and expand the scope of robust enforcement actions in this and other markets, including through actions by the newly formed IP Enforcement Task Force,” the report reads.