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Luxury brands sue Alibaba

News, 19 May 2015
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BEIJING/NEW YORK: Alibaba is being sued by the parent company of Gucci, Yves Saint Laurent and other luxury brands amid allegations the Chinese ecommerce giant profited from the sale of counterfeit goods on its platform.

The Paris-based Kering group served a lawsuit in a Manhattan court on Friday, alleging that Alibaba has been complicit in the sale of fake handbags, watches and other luxury goods, Reuters reported.

Kering accused Alibaba of providing marketplace advertising and other essential services necessary for counterfeiters and that it profits from selling goods that infringe trademark laws.

This is the second time in a year that Alibaba has faced a lawsuit from Kering, which withdrew its previous complaint last summer after Alibaba agreed to co-operate over counterfeiting.

However, Alibaba issued a statement, insisting that it continues "to work with numerous brands to help them protect their intellectual property" and said it believed this latest complaint "has no basis" and it will be fought "vigorously".

Alibaba has been dogged for years by suspicions about the prevalence of counterfeit goods on its Tmall and Taobao sites and it has faced official criticism in the past that it has not done enough to police who sells there.

Just last month, the Chinese authorities announced a series of measures to crack down on counterfeit and substandard goods sold online in the country and the initiative was widely regarded as heaping further pressure on Alibaba.

But the company insists it takes the issue seriously and has announced that it has teamed up with Israeli startup Visualead to introduce a new dotless code that is able to confirm the authenticity of a product.

It will work with major luxury brands, such as L'Oréal, to add the codes directly to their products, which can be scanned with Alibaba's Taobao app to verify if they are real or not.

Data sourced from Reuters, Wired; additional content by Warc staff

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