Alibaba sues over fake Swarovski watches

Chinese eCommerce giant Alibaba is suing two vendors who allegedly sold fake Swarovski watches on its online marketplace Taobao.

This follows Taobao being placed back on the US “notorious markets” list for fake goods last month, just four years after it had been removed.

Alibaba Group has filed a US$201,320 lawsuit against Liu Huajun and Wang Shenyi, two sellers the company claims peddled counterfeit luxury watches on Taobao. The company is suing for violation of contract and goodwill, filing in the Shenzhen Longgang People’s District Court.

By taking legal action – both in criminal and civil courts – Alibaba hopes counterfeiters will be scared off from selling on Taobao. It is the first time a platform has sued its sellers in China over counterfeiting.

“Selling counterfeits ruins the hard-earned trust and reputation Alibaba has with its customers,” says Alibaba Group chief platform governance officer Jessie Zheng.

Zheng, who has been recognised by the Chinese government for her anti-counterfeiting efforts at Alibaba, says the company plans to pursue other vendors trafficking in counterfeit goods, and take them to court.

She says Alibaba has added litigation to its IPR enforcement toolbox, hoping jail sentences and crippling fines will remove any incentive for counterfeit sellers to try again.

Products compared

Alibaba used data analysis to root out alleged fake sellers, then bought the suspect products to compare with the real items.

Data analytics “make it increasingly difficult for these illicit sellers to hide in the shadows”, says Alibaba’s head of global intellectual property enforcement Matthew Bassiur.

After comparing the suspect watches’ quality, workmanship and packaging to confirm that they were counterfeit, Alibaba handed the seller’s information to the Shenzhen police, who raided a warehouse and seized an estimated $28.7 million in counterfeit Swarovski products.

Alibaba has spent hundreds of millions of dollars fighting counterfeiters, with more than 2000 staff members dedicated to detecting fake products, along with 5000 volunteers, reports Cnet. Between January 2013 and November 2014, the company spent $161 million removing more than 90 million counterfeit items from Taobao’s listings. In 2015, the group spent $21.6 million just to buy fake goods to test against real products.

Swarovski says it lauds Alibaba’s efforts to protect brands, and its platforms’ integrity.

In the US, Amazon has the same issues. In November, it also filed two lawsuits, alleging more than 20 companies were selling fake exercise and furniture moving equipment.

* Photo: Authentic Swarovski watches (by Swarovski)

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