The US government has placed Pinduoduo, China’s third-largest e-commerce platform, on a blacklist of “notorious markets” for violations of intellectual property rights and the sale of suspected counterfeit goods.

It is the first time that the Office of the United States Trade Representative (USTR) has added the Tencent-backed platform to its annual notorious markets list, which also includes Alibaba’s Taobao marketplace for the third year in a row.

This year’s report highlights 33 online markets and 25 bricks-and-mortar markets across 36 countries that “are reported to engage in and facilitate substantial copyright piracy and trademark counterfeiting”.

But the inclusion of two such important Chinese companies is one of the more notable highlights of the report given that the US and China are currently locked in a tit-for-tat trade war.

Shanghai-based Pinduoduo, which was founded only three years ago and has since grown massively through heavy discounting in the smaller cities and rural areas of China, is accused of selling counterfeit “shanzhai” products.

“Many of these price-conscious shoppers are reportedly aware of the proliferation of counterfeit products on but are nevertheless attracted to the low-priced goods on the platform,” the UTSR said, adding that the company needs to do more to tackle the piracy problem.

However, Pinduoduo swiftly criticised its inclusion on the list. “We do not fully understand why we are listed on the USTR report, and we disagree with the report,” a company spokesperson told TechCrunch.

“We will focus our energy to upgrade the e-shopping experience for our users. We have introduced strict penalties for counterfeit merchants, collaborated closely with law enforcement and employed technologies to proactively take down suspicious products.”

The USTR also criticised Alibaba’s Taobao, saying: “Although Alibaba has taken some steps to curb the offer and sale of infringing products, right holders, particularly SMEs, continue to report high volumes of infringing products and problems with using takedown procedures.”

Alibaba responded by insisting that its “results and practices have been acknowledged as best-in-class” and that “zero” industry associations have called for its inclusion in this year’s USTR report.

Sourced from USTR, TechCrunch; additional content by WARC staff