Gucci, YSL, and More Sue Alibaba for Selling Fakes

Luxury brands call China's e-commerce giant a "pirate."

The Alibaba logo on an office exterior in China.
Photo: Leon Lee, Flickr.

In a lawsuit that raises a number of issues about the sale of expensive counterfeit goods online, high-end brands including Gucci, Balenciaga, Bottega Veneta, and Yves St. Laurent have sued Alibaba, China’s largest e-commerce site. Alibaba, whose sales eclipse those of eBay and Amazon combined, has plans for a US stock listing next month (under the ticker symbol BABA) that experts say could be the world’s largest ever tech company initial public offering. The company has acknowledged the risk of exposure to lawsuits like this one.

Gucci and the other companies called Alibaba a “pirate” according to Courthouse News in their lawsuit filed in US federal court last month (it was filed under seal on July 10 and unsealed on July 24). The companies allege that Alibaba makes billions of dollars by helping “an army of counterfeiters sell fakes.”  Gucci says Alibaba provides the marketplace and support services for selling counterfeit goods. In addition to offering shipping and credit card processing services, the Chinese e-commerce platform helps sellers to identify and buy keywords that attract buyers looking for authentic goods.

The suit also names nine Alibaba affiliates as lead defendants, including Taobao Holding, and 19 other online merchants based in China and Hong Kong. They claim that the defendants made $8.4 billion in the year that ended this past March 14, with a whopping net income of $3.7 billion. The suit further alleges that Alibaba has received direct complaints about counterfeit products but has done little to address or halt the problem.

According to an earlier report in the Wall Street Journal, Alibaba offered to remove problematic listings for brands whose owners buy their own stores on its site. Gucci and its co-plaintiffs are seeking an injunction and damages for trademark infringement, unfair competition, and RICO (Racketeer Influenced and Corrupt Organizations Act ) violations.

artnet News has recently been in communication with a vendor selling various sizes and colors of resin and stainless steel balloon puppies that are knockoffs of the same balloon dog that Jeff Koons has been producing for years, and which typically bring tens of millions of dollars at auction. When we asked the vendor, VLA Sculpture of Beijing, whether these are clearly marked as Koons replicas, a representative told us that the sculptures do not come with a “mark to show it is replicas of Jeff Koons. But if you need, we will mark on the statue, it’s no problem.” Tellingly, VLA Sculpture’s Alibaba listings for the Koons replicas have since been removed.

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