Alibaba and Kering reach deal on fakes

PUBLISHED : Wednesday, 13 August, 2014, 1:11am
UPDATED : Wednesday, 13 August, 2014, 1:11am

Alibaba Group is co-operating with Kering to stem the sale of fake products after the maker of Gucci withdrew a lawsuit that alleged Alibaba took part in violating trademarks.

The claims were withdrawn after dialogue between the two companies, Alibaba spokeswoman Florence Shih said. The suit, filed in New York last month, said China's biggest e-commerce company and affiliates made it possible to sell fakes throughout the world, according to court documents.

Counterfeits of Kering brands such as Yves Saint Laurent, Bottega Veneta and Balenciaga proliferate on the internet shopping platforms of Alibaba, the Paris-based company said in its lawsuit. Alibaba, whose initial public offering may be the biggest in US history, has been cracking down on fakes by banning listings that may breach intellectual property rules, forcing vendors to make deposits and using a ratings system.

"Kering and Alibaba have agreed to work together in good faith through the normal business process on ways to enhance intellectual property protection," the companies said in separate statements.

While Kering withdrew the suit against Alibaba, it is continuing legal action against merchants named in the filing. The French company declined to comment beyond its statement.

It usually takes Alibaba as long as five working days to remove a product, according to the company. The perception that fakes are commonplace on its sites could damage its reputation, Alibaba said in its initial public offering filing with the Securities and Exchange Commission.

China is host to a number of markets known for counterfeit merchandise, the Office of the US Trade Representative said in a February report. Authorities arrested 59,000 people and seized more than 9,000 tonnes of fake and shoddy products last year in cases worth 172.9 billion yuan (HK$217.7 billion), a Ministry of Public Security official said last January.