Alibaba Takes Vendors to Court Over Alleged Fake Watches

The two vendors allegedly sold counterfeit Swarovski timepieces over Taobao, the company’s version of eBay

Alibaba Group has sued two vendors for allegedly selling counterfeit Swarovski watches over Taobao, the Asian e-commerce giant’s version of eBay.

The case, lodged by Alibaba in the Shenzhen Longgang People’s District Court against two China-based sellers, seeks RMB 1.4 million ($201,320) for “violation of contract and goodwill.”

“Selling counterfeits not only violates our service agreement, it also infringes on the intellectual property rights of the brand owner, puts inferior products in the hands of consumers, and ruins the hard-earned trust and reputation Alibaba has with our customers,” said Jessie Zheng, Alibaba Group’s chief platform governance officer, in a statement.

Zheng warned that the company plans to take more online vendors trafficking in counterfeits to court, hoping possible criminal and civil sanctions will remove the incentive for selling counterfeits.

Alibaba says it first honed in on the two vendors through data analysis. It then purchased two items from them and had Swarovski verify the watches were fake.

In a statement, Swarovski said that it applauds any steps Alibaba takes to discourage counterfeiters.

In August, police in Shenzhen’s Luohu District, using information provided by Alibaba, seized 125 fake Swarovski watches and two counterfeit Swarovski official seals, with an estimated total value of $28.7 million.

The court case follows a larger anti-counterfeit crackdown Alibaba conducted in conjunction with police in Zhejiang Province last year.

Alibaba has long been considered a haven for counterfeits, with the Office of the United States Trade Representative adding Taobao marketplace to its “notorious markets” for counterfeits list last December. Alibaba countered the move was spurred by “politics” in an “election year.”

Alibaba says it has over 2,000 full-time employees responsible for removing counterfeits.

JCK News Director