Alibaba has dismissed the lawsuit brought by luxury giant Kering over counterfeit merchandise as “wasteful litigation”, saying it will fight the case “vigorously”.
Kering, which owns high end brands such as Gucci, Alexander McQueen, Saint Laurent and Balenciaga, is suing the Chinese etailer over claims it is complicit in the sale of fake handbags, watches and other items. Documents filed in New York on Friday went so far as to compare it to “racketeering”.
Bags with Gucci’s trademark were being sold on an Alibaba platform by a vendor for as little as $2 apiece, compared with $795 for an authentic version, the group claims.
Kering argues that it provides “marketplace advertising and other essential services necessary for counterfeiters”, and that Alibaba profits from the sale of items that infringe its intellectual property.
But Alibaba has rebutted these claims.
“We continue to work in partnership with numerous brands to help them protect their intellectual property, and we have a strong track record of doing so,” an Alibaba spokeswoman said in a written statement. “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.”
Counterfeiting is a huge issue for brands selling into China, where the sale of faked goods is widespread and remains a challenge for brands and retailers alike to control.
Marketplaces like Alibaba are seen as contributing to the problem, even coming under fire from Chinese watchdogs, but the listed business has worked hard to reassure brands that it can be a trusted platform. It has, for example, a “zero-tolerance policy” towards fakes, and has co-operated in hundreds of counterfeiting cases in the last year.
It also acts as a carrot to get brands on the site: around the time Burberry launched on its Tmall subsidiary it was rumoured that one of the reasons behind the move was to get Alibaba to up its game when it came to ridding the site of fakes.
This is the second time in a year that it has faced a lawsuit from Kering, though the group withdrew its original complaint when it received an agreement from Alibaba to cooperate on reducing the number of fakes on sale.