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Alibaba Faces EU Consumer Complaints Over Contract Terms

Stephanie Bodoni

(Bloomberg) -- Alibaba Group Holding Ltd. faces complaints from six European consumer organizations into allegedly unfair user terms for its online retail service, arguing some of the clauses violate European Union law.

Consumer groups, including from France, Spain, Italy and the Netherlands, filed complaints with national regulators to probe “unclear” and “problematic contract terms and practices” for AliExpress users in the EU. The “most serious problem” for the consumer groups are the terms for dispute settlements between sellers and consumers.

BEUC, which represents the national consumer groups, said Alibaba is violating EU laws by imposing terms on users that would force them to go to a Hong Kong arbitration court in case disputes can’t be settled amicably. Consumers should have the right to bring cases in their own country, the group said.

“If Alibaba targets consumers in the EU market, it has no choice but to respect EU consumer rules. If it does not, it’s up to national authorities to step in,” Monique Goyens, director general of BEUC, said in a statement on Friday. “We call on the consumer protection authorities to look urgently into this issue and to take action.”

A spokesperson for Alibaba said: "We will study the complaint carefully when we receive it and are ready to engage in discussions with the Commission and all relevant authorities.”

Growing Chinese affluence is propelling Alibaba’s international expansion, which include helping foreign businesses tap Chinese consumers and reach foreign shoppers through AliExpress.

The strength of its e-commerce business is helping Alibaba weather losses in newer businesses of cloud computing and digital entertainment. While revenue in those nascent divisions is surging, they are yet to make money and costs are soaring as Tencent Holdings Ltd. and Baidu Inc. vie with Alibaba for licensed content.

(Updated with Alibaba comment.)

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