Feb 17 (Reuters) – E-commerce websites operated by China’s Tencent Holdings Ltd (0700.HK) Alibaba Group Holding Ltd. (9988.HK) It was included in the US government’s latest “notorious market” list, the US Trade Representative’s office said Thursday.

The list identifies 42 online and 35 physical markets that have been reported to have participated in or facilitated significant trademark counterfeiting or copyright piracy.

“This includes the identification for the first time of AliExpress and the WeChat e-commerce ecosystem, two important China-based online marketplaces that reportedly facilitate significant trademark counterfeiting,” USTR said in a statement.

China-based online marketplaces Baidu Wangban, DHGate, Pinduoduo and Taobao also remain part of the list, along with nine physical markets located within China that are “famous for manufacturing, distributing and selling counterfeit goods,” the bureau said.

Alibaba said it will continue to work with government agencies to address intellectual property protection concerns across its platforms.

Tencent said it strongly disagreed with the decision and was “committed to working collaboratively to resolve this matter.” It added that it monitors, deters and effectively takes action on violations across its platforms, and has invested significant resources in protecting intellectual property rights.

Listing on the list is a blow to the reputation of the companies but does not entail direct penalties.

Industry bodies including the American Apparel and Footwear Association (AAFA) and the Motion Picture Association have welcomed the release of the US Trade Representative’s report.

The US office said in a separate report released on Wednesday that the US needs to pursue new strategies and update domestic trade tools to deal with China’s “state-led non-market policies and practices.”

The United States and China have been embroiled in trade tensions for years over issues such as tariffs, technology and intellectual property, among others.

The United States has said that China has failed to meet some commitments under the so-called “phase 1” trade agreement signed by the administration of former President Donald Trump. Read more

Reported by Kanishka Singh in Bengaluru; Editing by Sandra Mahler and Lincoln Fest.

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