Alibaba Sues Two Taobao Merchants for Selling Counterfeits

(Beijing) —Alibaba Group Holding Ltd. has sued two merchants on its Taobao online marketplace for allegedly selling counterfeit watches, as the e-commerce giant seeks to convince observers that it’s serious about fighting piracy.

Alibaba is suing two sellers of fake Swarovski-brand watches in a court in the southern boomtown of Shenzhen. The lawsuits seek 1.4 million yuan ($201,000) in damages for contract and goodwill violations.

Alibaba has been dogged by a series of scandals over the last two years involving piracy. The company made headlines two years ago when a survey by a top Chinese regulator showed that nearly two-thirds of the goods traded on the Taobao marketplace were fakes.

That was followed by another embarrassment last year when luxury brands, including Tiffany & Co. and Michael Kors, defected from an anti-piracy group after Alibaba was allowed to join. Most recently, Alibaba’s name returned to an annual list of “notorious markets” for piracy published by Washington last month, reversing a decision four years earlier to remove it from the list.

Alibaba said the latest lawsuits are its first specifically targeting sellers of knockoff products in its online marketplaces. It added it has begun compiling a list of other sellers of counterfeit goods, and plans to take similar action in the future.

“We take a holistic and technology-driven approach to (intellectual property rights) 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.”

Contact reporter Yang Ge (geyang@caixin.com)