Taobao made waves a couple weeks ago when it teamed up with the Zhejiang People’s Court to serve as the platform for an online government auction site called Taobao Sifa. In the time since then, the site has conducted two successful auctions, but it has apparently also raised the ire of the China Auction Industry Association, which says Taobao is violating the laws that govern auctions both online and off.
According to an industry insider we spoke to, though, Taobao should be in the clear as long as it is just a technological platform and the court itself conducts the auctions. As a non-commercial enterprise, the Zhejiang People’s Court should be exempt from the laws that govern commercial auctions. I have a feeling the China Auction Industry Association’s lawyers may disagree or argue that Taobao has some commercial stake in the venture, though, so we may yet see some kind of court case result from this.
For its part, Taobao doesn’t seem to be particularly concerned. When asked for comment about the China Auction Industry Association’s actions, an Alibaba rep told us:
This online auction model is unprecedented in the Chinese market and in this instance, Taobao.com is maintaining its role as a third party platform provider offering a bridge between the buyer and seller. The success of the first auction demonstrates that this model has the potential to do well in the Chinese e-commerce sphere as it is not constrained by geographical limitations; this results in high participation rates nationwide and competitive auction prices for the seller.
The Taobao Sifa site continues to be operating normally, although there are no new auctions at the moment, so we’re guessing that Taobao isn’t too worried about the accusations. Still, is all this going to end up in court someday? We’ve got no way of being sure, but we’re guessing if it does, the guys at the Zhejiang People’s Court can hook Taobao up with some pretty good lawyers.
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