Alibaba faces lawsuit from luxury brands over counterfeits

Alibaba called the lawsuit wasteful and plans to fight it in court

Alibaba Group offices in China.

Alibaba Group offices in China.

Alibaba Group has been hit with a lawsuit from luxury brands that alleges that the Chinese e-commerce giant has been deliberately promoting the sale of counterfeit products.

The lawsuit, filed in a New York federal, comes from Gucci, Yves Saint Laurent and other brands owned by Kering. The brands claim that Alibaba has knowingly helped an "army of counterfeiters" to sell their products over its e-commerce sites.

These counterfeiters include little-known Chinese vendors that are selling fake Gucci bags for cheap prices, and in wholesale quantities. Alibaba's search algorithms direct customers to these counterfeits, even when it's obvious that the products are fakes, the brands alleged in a filing.

Instead of banning these merchants, Alibaba has sought to profit from the counterfeit sales, the lawsuit added. Last July, Kering filed a similar legal action against Alibaba, but later withdrew the complaint, after the two companies agreed to crackdown on the counterfeiting together.

But Kering on Friday filed a new lawsuit, in spite of the earlier effort.

On Monday, Alibaba said in an email it had a "strong track record" of helping brands protect their intellectual property. "Unfortunately, Kering Group has chosen the path of wasteful litigation instead of the path of constructive cooperation. We believe this complaint has no basis and we will fight it vigorously," the company added.

Alibaba is China's largest e-commerce company, and it operates both retail and wholesale sites for Chinese and international customers. Over the years, the company has been repeatedly dogged by allegations that it doesn't do enough to stop fake goods from reaching its site.

In January, Alibaba clashed with a Chinese regulator over a government investigation that found the company had allegedly failed to clean up the problem. In response, Alibaba called the government report unfair and biased, adding that it had been working hard to crackdown on the illegal goods.

Alibaba shot into prominence after an initial public offering in the U.S. that raised US$25 billion last year. The company, however, has warned investors that it could face lawsuits over the counterfeiting problem.

Kering's lawsuit is demanding that the U.S. court order Alibaba to pay damages and stop the sale of counterfeit products related to the brands.

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags governmentregulationinternetlegale-commerceCivil lawsuitsAlibaba Group

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Michael Kan

IDG News Service
Show Comments

Brand Post

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Luke Hill

MSI GT75 TITAN

I need power and lots of it. As a Front End Web developer anything less just won’t cut it which is why the MSI GT75 is an outstanding laptop for me. It’s a sleek and futuristic looking, high quality, beast that has a touch of sci-fi flare about it.

Emily Tyson

MSI GE63 Raider

If you’re looking to invest in your next work horse laptop for work or home use, you can’t go wrong with the MSI GE63.

Laura Johnston

MSI GS65 Stealth Thin

If you can afford the price tag, it is well worth the money. It out performs any other laptop I have tried for gaming, and the transportable design and incredible display also make it ideal for work.

Andrew Teoh

Brother MFC-L9570CDW Multifunction Printer

Touch screen visibility and operation was great and easy to navigate. Each menu and sub-menu was in an understandable order and category

Louise Coady

Brother MFC-L9570CDW Multifunction Printer

The printer was convenient, produced clear and vibrant images and was very easy to use

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?