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E-commerce

Alibaba takes legal action against counterfeiters

Alibaba Group has taken legal action against two fake Swarovski watch sellers on its Taobao platform, claiming RMB1.4 million in damages for contract and goodwill violations.

The lawsuit was filed with Shenzhen Longgang District People’s Court and is the first of many actions the e-commerce giant says it will take against a list of counterfeiters it has compiled.

Last month, Alibaba sued a technology company for helping online vendors illegally boost their sales volumes and facilitate fake reviews in order to move up in search results, a process known as “brushing” in China.

“We want to mete out to counterfeiters the punishment they deserve in order to protect brand owners.

“We will bring the full force of the law to bear on these counterfeiters so as to deter others from engaging in this crime wherever they are,” Alibaba Group’s chief platform governance officer, Zheng Junfang, said.

Alibaba has recently stepped up efforts to combat counterfeit goods under an initiative called Operation Cloud Sword.

Since 2015, this initiative has used big data, artificial intelligence and machine learning to analyse hundreds of millions of data points, including product specifications, customers reviews, logos and price, and identify discrepancies.

The model rates goods and merchants on a scale from 0 to 100 and flags high risk scores. Based on these findings, Alibaba then provides leads on suspected counterfeiters to the authorities.

Between April and July 2016, Chinese authorities cracked down on 417 production rackets, arrested 332 suspects and seized fake goods valued at RMB1.43 billion as a result of the company’s leads, Alibaba claims.

“We take a holistic and technology-driven approach to IPR-enforcement,” Matthew Bassiur, Alibaba’s head of global intellectual property enforcement, said.

“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.”

In addition, Alibaba spot checks products on its platforms through a test-buy purchase program. That’s how the company confirmed one of the Swarovski watch sellers was peddling fakes.

After receiving a lead from Alibaba,  the Shenzhen Luohu District police raided the seller on August 10, 2016, and confiscated over 125 counterfeit Swarovski watches, worth nearly RMB2 million.

Another fake Swarovski seller on Taobao was found during the action.

But even as Alibaba celebrates this recent success, ridding its e-commerce platforms of counterfeiters remains an uphill battle.

In December 2016, the US Office of the Trade Representative put Taobao back on a list of “notorious markets” known for peddling fake goods four years after the marketplace managed to get off the list.

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