As part of its attempts to crack down on the sale of counterfeit products, Alibaba has launched legal action against two fake Swarovski watch sellers on its Taobao platform.
Alibaba has filed a lawsuit with Shenzhen Longgang District People’s Court against the sellers, claiming RMB1.4 million (US$200,000) in damages for contract and goodwill violations.
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It is the first ever legal action the company has taken in China against counterfeiters and comes two weeks after the US Office of Trade Representatives placed Taobao on its “notorious markets” list for selling fake products.
The sale of knock offs on its platform have been causing headaches for the Chinese company. Taobao, which was removed from the annual list in 2012, landed back on the list due to challenges right holders experienced in removing and preventing sales of fake goods.
“The Taobao.com e-commerce platform is an important concern due to the large volume of allegedly counterfeit and pirated goods available and the challenges right holders experience in removing and preventing illicit sales and offers of such goods,” the agency said.
Alibaba said it was “disappointed” by the agency’s decision to include Taobao on the list, saying it “ignores the real work Alibaba has done against counterfeiters.”
The company said in 2016 alone it proactively removed more than double the number of infringing product listings than in 2015. Now it may seek damages against those sellers, Alibaba said it has complied a list of counterfeiters which it plans to launch legal action against.
“We want to mete out to counterfeiters the punishment they deserve in order to protect brand owners . We will bring the full force of the law to bear on these counterfeiters so as to deter others from engaging in this crime wherever they are,” said Zheng Junfang, chief platform governance officer of Alibaba Group.
Alibaba’s platform governance team detected a Taobao merchant suspected of selling fake Swarovski watches using big data. The team then initiated its “test-buy purchase program” to buy a Swarovski watch, which was later confirmed by the right holder Swarovski to be a counterfeit.
As a result of the leads provided by Alibaba, the Shenzhen Luohu District police raided the seller on August 10, 2016 and confiscated over 125 counterfeit Swarovski watches, valuing nearly RMB2 million. Another fake Swarovski seller on Taobao was founded related to the case during the action.
“We take a holistic and technology-driven approach to IPR-enforcement,” said Matthew Bassiur, Alibaba’s head of global intellectual property enforcement. “Big-data analytics enhance our ability to identify and pursue counterfeiters, and make it increasingly difficult for these illicit sellers to hide in the shadows.”
Alibaba is also clamping down on “brushing” – falsifying purchases to generate positive reviews for a seller. Brushing can improve seller’s reputation, ranking them higher on Alibaba’s platforms and undermining the platform’s credibility. Last month, the company took a brushing operator to court suing it for RMB2.16 million yuan in damages.