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Alibaba Is Suing Users Over Counterfeits: Suspicious Timing or Sign of Change?

Alibaba is suing user for selling counterfeit goods In an ironic twist of events, ecommerce hub Alibaba is suing over alleged counterfeit goods (instead of being sued). But the suit has cynics wondering: Is this a toothless PR maneuver on Alibaba’s part; a tack to distract from its recent reputation setback? Let’s quickly review the case, and then…speculate.

Alibaba Is Suing Users Over Counterfeits, But Not Asking For Much In Damages

Who Is Alibaba Suing? Someone selling “Swarovski” (cough) watches on Alibaba.

How Did It All Go Down? “Data analytics” and covert purchases led Alibaba to the counterfeit lair. And in classic Chinese law enforcement style — (which is a close cousin to classic Crockett and Tubbs style) — police raided a Shenzhen warehouse, uncovering 125 knockoff watches. (Cue the Price Is Right WhompWaaaaa, right!? Only 125 watches? That’s not a raid; that’s Capone vault territory…but I digress.)

On What Grounds Is Alibaba Suing? The online retailer claims terms of service violations and intellectual property infringement.

How Much Does Alibaba Want? ¥1.4 million (yuan), which, at the time of this writing, converts to about $202,000 US

Is The Timing of This Alibaba Counterfeit Lawsuit Suspicious?

Did you know that the United States Trade Representative’s office chucked Alibaba onto the Notorious Markets List, a compendium of places around the world — both online and off — where counterfeiters gather to collect or sell their wares. So, at face value, the timing seems a tad suspicious.

But then again, maybe that’s rushing to an unfair conclusion. After all, several months ago, Alibaba super-sized its anti-counterfeit army. Its mission: Hunt fraudsters. So, all things considered, who’s to say we’re not witnessing a bit of bad — but ultimately coincidental — timing?

Ecommerce Lawyer On Alibaba’s Counterfeit Lawsuit: “Alibaba Has A Piracy Problem”

Ecommerce attorney Aaron Kelly acquiesced that Alibaba “has a piracy problem.” What can people do about it? “Like anything,” he reasoned, “investing in anti-counterfeit efforts will help. But we also have to be honest about the marketplace.” He clarified, “To be clear, I think both Alibaba and Amazon are important companies — and that’s not some obsequious hedging. They both provide robust platforms that make life easier for entrepreneurs. What could be better than that? But with any marketplace, barbarians are at the gate. And what some people forget — or maybe don’t even realize — is that counterfeiters make money for the ecom platforms too. Sometimes, they make more than the average ethical seller, because, well, as the old saying goes, unfortunately, crime can pay.”

“To be clear,” Kelly enthused, “I’m not endorsing unauthorized knockoffs; just pointing out the uneasy win-win relationship that can sometimes exist between successful counterfeiters and online retail platforms.”

So, is fighting knockoff artists a useless exercise? “No,” Kelly explained. “It’s possible to shake counterfeiters with a combination of social engineering, protective measures, and legal maneuverings. But there’s always a chance that a scammer you successfully shoo away will just move on to a more vulnerable target.”

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