22 December 2016

US releases Special 301 Out-of-Cycle Review of Notorious Markets for 2016

United States Trade Representative (USTR) Michael Froman has announced the findings of the Special 301 Out-of-Cycle Review of Notorious Markets for 2016, which highlights specific physical and online markets around the world that are reported to be engaging in and facilitating substantial copyright piracy and trademark counterfeiting.

“This Notorious Markets List illustrates the seriousness of copyright piracy and trademark counterfeiting in online marketplaces,” said Froman. “The 2016 List underscores the need for accountable governments everywhere to take on these forms of piracy and counterfeiting at every stage of the global supply chain to prevent final products that put health and safety of end-consumers at risk.”

Every year, the list includes online and physical markets in which pirated or counterfeit products and services are reportedly available, but does not constitute a legal finding of a violation or an analysis of the general intellectual property rights (IPR) protection and enforcement environment in any affiliated country or economy.

The list keeps track takes stock of emerging infringement models and adds stream-ripping sites and piracy apps to the list of the most damaging digital marketplaces. Stream ripping is the unauthorised conversion of content from a licensed streaming site into an unauthorised copy for distribution via download to the requester. Nearly 30% of Internet users obtain copies of music from stream ripping services, the report said, also noting that in 2015, digital music revenues surpassed physical sales for the first time, and streaming revenues—which grew more than 45%—were a major driver behind overall global growth. The trend has led to Youtube-MP3 being added to the Notorious Market List this year as an example of one of the "reportedly more popular stream ripping sites". Elsewhere, the report says that Streaming sites like Putlocker are "overtaking torrent and other piracy sites as the primary mode of movie and television piracy".

In addition, counterfeiters continue to take advantage of the popularity of online shopping to distribute counterfeit goods via small parcels which now comprise the most popular method of shipping counterfeit goods worldwide, the report stated.

The US encourages all responsible authorities to intensify efforts to combat piracy and counterfeiting, and to use the information contained in the Notorious Markets List to pursue legal action where appropriate.

The following digital marketplaces were either based in Asia Pacific and the Middle East or are popular with users from these regions:

BeeVideo is an application allegedly developed in China that facilitates the viewing of allegedly infringing movies and television shows on smart TVs through set-top boxes, and on mobile devices. The app is available through the BeeVideo.tv website portal. BeeVideo has been downloaded more than 12 million times.

ExtraTorrent from the Ukraine has Alexa rankings in India, Pakistan, and China of 170, 19, and 319 respectively, which reflect its popularity in these countries. ExtraTorrent has also been identified as a source of malware.

The GongChang platform specializes in industrial products and servicing manufacturers and retailers. GongChang is reportedly one of several online markets in China that are well-known for the sale of counterfeits, including counterfeit security tags that retailers affix to products as part of a shoplifting prevention system.

The problem with counterfeit security tags is that they may mislead customers into thinking that the goods they buy are actually authentic, or that the goods are protected when they can be easily shoplifted. "The sale of these counterfeits at the B2B level illustrates how significant quantities of counterfeit inputs can enter global supply chains," the report notes.

This site is one of several based in Russia and Ukraine that is popular in India. It looks like a legal music download site, claims to be legal, but sells tracks for much less than the market rate.

Muaban is a Vietnamese e-commerce platform that sells legitimate goods, but which stakeholders have also identified as offering counterfeit clothing and footwear. It has over 3 million page views each month.


MyEgy is one of the largest marketplaces for infringing video game and other copyrighted content in the Middle East. Stakeholders report that hundreds of new links to infringing video game files are posted to the site daily, and that the operator "is unresponsive to takedown requests". The MyEgy site, hosted in Russia and created by a web developer in Egypt, is in Arabic, offering content in both Arabic and English.

Nanjing Imperiosus Technology Company
Nanjing Imperiosus, based in China, is reported to disproportionately provide services to illegal online pharmacies.

Putlocker is one of the most-visited video streaming sites in the Asia-Pacific region for allegedly pirated movies and television shows. The operator of Putlocker is believed to be based in Vietnam and appears to be taking actions to evade enforcement measures.

The Taobao.com e-commerce platform, one of the 15 most popular websites globally and among the top five websites in China, has a large volume of allegedly counterfeit and pirated goods available and has proved challenging when right holders try to remove and prevent illicit sales and offers of such goods.

The report details what Alibaba Group, the owner of Taobao, has done to clamp down on piracy, including the introduction of the Good Faith Program for IPR enforcement, but also said: "There is a reported significant disparity between the timeliness and effectiveness of Alibaba’s responses to complaints submitted by right holders in the Good Faith Program and those outside the programme. While recent steps set positive expectations for the future, current levels of reported counterfeiting and piracy are unacceptably high".

In response Michael Evans, President of the Alibaba Group said: "We are very disappointed by the USTR’s decision to include Taobao on its 'notorious markets' list, as we are far more effective and advanced in IPR protection than when the USTR took us off the list four years ago. The decision ignores the real work Alibaba has done to protect IP rights holders and assist law enforcement to bring counterfeiters to justice. The more than 100,000 brands that operate on Alibaba’s marketplaces cannot all be wrong – they are a clear demonstration of the trust that rights holders place in us. We question whether the USTR acted based on the actual facts or was influenced by the current political climate."

The Pirate Bay
The Pirate Bay is one of the longest-running and most vocal torrent sites for admittedly illegal downloads of movies, television, music, and other copyrighted content. It is currently hosted out of Vietnam to avoid enforcement.

Stream ripping site Youtube-mp3 enjoyed 4.8 billion visits in the past year, and a country-specific Alexa ratings of 111 in Turkey. The site, which allegedly accounts for about 40% of the world’s stream ripping activity, is currently facing legal action.

Physical markets that carry counterfeit goods include:

Baiyun Leather Goods Market in Guangzhou, as well as shops in the Jin Long Pan Foreign Trade Garment Market in the same city; Chenghai District in Guangdong Province, reportedly a counterfeiting zone, as well as Wu Ai Market in Shenyang, Liaoning Province. In Beijing, counterfeit hotspots listed in the report include the Cheng Huan Cheng International Auto Parts Market, and the Silk Market.

Southeast Asia
Harco Glodok and Mangga Dua, two popular markets in Jakarta, Indonesia, as well as Ninh Hiep in Hanoi, Vietnam have been identified as alleged marketplaces which sell fake goods. MBK Center in Bangkok, Thailand and Rong Kluea near the border with Cambodia, appear to be the largest wholesale and retail market for counterfeit goods in Thailand, the report said.

Gandhi Nagar in Delhi is highlighted for counterfeit apparel while Burma Bazaar in Chennai is highlighted for a wide variety of counterfeit goods and pirated media discs. Kashmere Gate, also in Delhi, is an example of a market allegedly selling counterfeit auto parts.


Read more about Evans' views on the report