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Alibaba Group is now on trial with representatives from Gucci and Yves Saint Laurent, for profiting from sales of counterfeit goods.
The Chinese e-commerce market works very well, with billions invested in industry but heavy processes over selling counterfeit goods as well. China is the country of all possibilities when it comes to imitation, replicas and fake items sold for cheap.
In the Alibaba case, the stakes are high. They are accused of selling designer products on an illicit basis and now they face serious accusations.
The lawsuit is a setback for Alibaba’s effort to assure companies and regulators they are doing just the right thing to keep counterfeits off their online sales platforms.
Alibaba maintains its position, saying the accusations have no basis and the company will find the right ways to fight the fashion giants. Alibaba declares itself completely innocent in this case and goes on by saying they will continue working with numerous brands to help them protect their intellectual property. They also stated about having a strong track record that confirms their clean endeavors.
Alibaba is the world’s biggest e-commerce company by sales volume and this status comes with some strong responsibility. They have already launched a series of initiatives to keep counterfeit items off their platforms, a consequence of complaints coming from trademark owners. This type of issue has made the company invest in more than 2000 employees dedicated to anti-counterfeiting and consumer protection work.
Alibaba is presently accused of not only selling counterfeit items but also of allowing merchants on its platforms even if they declare the selling of unlicensed copies. They are thus accused of mail fraud and racketeering. Their fraud accusations go further with assumptions describing how their algorithms were “intentionally designed” to offer fake items when consumers type search boxes for brand names. Presumably, when a word like “knockoff”, a counterfeit term is used in search, Alibaba adds “handbag”.
Alibaba could be forced by court to disclose its revenue from sales of fake watches, handbags, clothing and other goods so that damages can be assessed.
The company’s value on the market has fallen by 15% this year, after complaints over counterfeit items have been filed. Now there are facing a trial where accusations describe them as being misleading.
No miracle lasts more than three days, they say and Alibaba is not an exception to the rule. They had a massive growth in market share last year, with 25 billion dollars raised in an initial public offering on Wall Street. They reported a considerable profit, with figures rising up to 295 billion £ but the story went down, with the new trials and tribulations over counterfeit goods.
Image Source: cnbc.com
