As part of our continuing mission to help businesses around the world become more profitable and entrepreneurs more successful by harnessing the power of e-commerce, Alibaba.com, a global e-commerce pioneer and the world’s leading business-to-business e-commerce company, is taking a critically important step to foster even greater confidence in our platform. During the last year, we saw tremendous growth in small business buyer usage on the international site. In order to further educate users on safe trading, while also helping offset a portion of losses suffered by a handful of small business buyers defrauded by suppliers who paid to list on the Alibaba.com platform, Alibaba.com has created the Fair Play Fund.
While the vast majority of transactions conducted between parties who meet on Alibaba.com are completed successfully, there unfortunately remains a very small minority of people who try to take advantage of small business buyers as they would in the off-line business world. The Alibaba.com international site has more than 11 million registered users, and, thanks in part to our efforts to foster an environment of safe trading, less than 0.05 percent of them have reported potentially fraudulent activity. As we continue to attract new small businesses to Alibaba.com, we are redoubling our efforts to maintain a trustworthy environment and to allow buyers and suppliers to engage in international trade confidently.
The development of a trustworthy platform is of great importance to Alibaba.com and has been our mission from the beginning. Over the years, we have taken a number of proactive steps to ensure fair trade between our users, including the third-party authentication and verification of paid members and providing guides to aid safe and fair trading (see notes below).
We also continue to assist buyers and suppliers in attempting to settle business disputes. In cases where a complaint of fraud against a supplier is substantiated, that supplier is immediately removed and banned from our platform. If the supplier was a paying member, the supplier forfeits their subscription fee. Forfeited fees are the source of our new Fair Play Fund, which aims to help buyers recover some of their financial losses given that they can demonstrate they were defrauded by a supplier using our platform.
· Established in 2009, the Fair Play Fund initially covered fraud disputes between buyers and China-based Gold Suppliers. As of January 2011, the Fair Play Fund also covers claims filed against Global Gold Suppliers.
· Guidelines for Fair Play Fund:
1. To be eligible for the Fair Play Fund payout, claimants must have presented a substantiated complaint before the Gold Supplier was removed from the site. Please note that Gold Suppliers are only removed from Alibaba.com after a complaint has been investigated and substantiated.
2. Claimants with losses of US $1,400 or less are eligible for 70 percent of amount lost. Claimants with losses greater than US $1,400 will receive a maximum of US$1,000. Two-thirds of complainants lost less than US $1,000 to fraud.
l From January 2009 to March 2010, 715 complainants reported being defrauded by China Gold Suppliers and substantiated their claims, becoming the first group to benefit from the Fair Play Fund. After completing the application process, the complainants received a total of about US $400, 000 in reimbursements.
l As of December 2010, more than 2,000 complainants have benefitted from the Fair Play Fund and have received compensation totaling more than US $1,500,000.
Like all other e-commerce B2B platforms, Alibaba.com acts as a marketplace and bears no financial or legal responsibility for transactions conducted between companies that connect outside our sourcing platform, but we do provide buyers and suppliers with assistance in compiling documentation and other evidence to resolve business differences, and when necessary, to pursue legal claims. Notwithstanding the new Fair Play Fund program, buyers still retain the right to pursue legal action against suppliers who don’t perform as expected and our assistance in those rare instances will continue to be available.
PROACTIVE SAFE TRADING EFFORTS
Overview of the measures that Alibaba.com has in place to ensure the safety and integrity of its platform for users:
Statement on Alibaba.com’s policy for banning members, whether paid or free, if they have engaged in activities that undermine the integrity and safety of the online business community:
Cumulative list of Gold Suppliers (paid members) that have been banned due to a violation of company policy such as engaging in fraudulent activity or repeated IPR infringement:
Portal for reporting online security issues: http://resources.alibaba.com/partner/trade_safe/report.html
Link to Alibaba.com’s Safety and Security Center homepage:
There are also three user discussion forums dedicated to Trust and Safety:
1. Safe Trading Basics Forum
In this forum, users can share tips on self-protection while doing business online.
2. Find Reliable Partners Forum
In this forum, users can share and solicit insight on prospective business partners they have encountered on Alibaba.com.
3. Report & Verify Fraud Forum
In this forum, users can notify other members about suspicious activity and raise awareness about potentially bad business partners.