With Recalls in the Spotlight, Chinese Giant to Work With US on Safety

PHOTO: In this Aug. 27, 2014 photo, a chef walks in the headquarter campus of Alibaba Group in Hangzhou in eastern Chinas Zhejiang province.PlayAP Photo
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In a first-of-its-kind agreement, a huge China-based company has agreed to work with the U.S. Consumer Product Safety Commission to stop illegal and recalled products from being sold to American consumers – a dangerous problem the U.S. is mightily struggling with domestically, as a recent ABC News investigation found.

Calling the unprecedented agreement “a victory for U.S. consumers and their safety,” CSPC Chairman Elliot Kaye said Tuesday Alibaba Group, the largest online and e-commerce company in the world, will now work closely with the Commission, including being given lists of potentially dangerous, recalled products to remove from sale. Kaye made the announcement at the Hong Kong Toys and Games Fair.

Alibaba boasted 300 million annual active buyers in 2014. The company does not sell products directly to consumers, but rather connects buyers and sellers of everything from oysters to iPhones.

In recent years, the company has been heavily criticized for not doing enough to remove counterfeit products being sold on its sites. Alibaba says it has spent over $160 million to block counterfeit products – removing 114 million listings – and bolster consumer protections. The company went public late last year.

A company spokesperson told ABC News today that U.S. customers account for a “small percentage” of Alibaba’s buyers, but that given the reach of the company – larger than eBay and Amazon combined – today’s move is “still impactful.” He added that the CPSC commitment beefs up protocol the company already had in place to look for recalled products on its sites.

Today’s agreement comes just two months after an ABC News investigation in which CPSC Chairman Kaye revealed that some 80 percent of products recalled in the U.S. generally remain unaccounted for – and that’s a “good” recall. Other times, 95 percent of potentially dangerous recalled products remain outside government control, many on store shelves, available online or inside American homes.

During the ABC News report, Kaye singled out the classified online site Craigslist for not doing enough to keep potentially hazardous, recalled products out of people’s homes. While Kaye called Craigslist “morally irresponsible,” the company insisted to ABC News that it indeed takes appropriate steps to thwart the sale of hazardous products.

Today Kaye told ABC News he met with Craigslist executives on his way to Hong Kong for this week’s convention and believes the CPSC is “now engaged in a positive and productive dialogue” with that company to implement safeguards against recalled products on the site.

And it appears the CPSC head took the momentum from the Craigslist dustup directly to Hong Kong.

In a blog posted early today, the CPSC noted, “Last November, Chairman Elliot F. Kaye made national headlines for urging certain online sites to take far greater responsibility for preventing the sale of dangerous, recalled consumer products on or through their sites. Today, the Chairman announced a ground-breaking voluntary consumer safety collaboration between the U.S. Consumer Product Safety Commission (CPSC) and Alibaba Group Holding Limited, the largest online and mobile commerce company in the world.”

Alibaba’s Senior Vice President for Corporate Affairs today praised the CPSC, saying the company is proud of the just-announced agreement.

“Chairman Kaye is a strong leader with an excellent track record of results in protecting U.S. consumers,” Jim Wilkinson said in a statement. “We look forward to working collaboratively with the Chairman and his team to do everything possible to protect consumers.”