(MENAFN- ProactiveInvestors) Alibaba Group Holding (NYSE:BABA) China’s largest e-commerce operator said it would fight a new lawsuit claiming it facilitates the sale of counterfeit merchandise.
Paris-based Kering which owns brands including Gucci Yves Saint Laurent and Puma on Friday filed a lawsuit against Alibaba accusing it of aiding the sales of counterfeit versions of its products.
Kering originally took legal action against Alibaba last July but dropped the case after the two sides agreed to discuss possible anti-counterfeit measures.
Alibaba said it was already taking action against fake goods and that it planned to fight the case.
The complaint “has no basis” and will be fought vigorously Alibaba said in an e-mail yesterday.
"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'' it said in a statement.
"Unfortunately Kering Group has chosen the path of wasteful litigation instead of the path of constructive co-operation.''
Alibaba says it has 2000 employees dedicated to anti-counterfeiting and consumer protection work and spent $160 million on that in 2013-14.
But the French firm has defended its action.
"This lawsuit is part of Kering's ongoing global effort to maintain its customers' trust in its genuine products and to continue to develop the creative works and talents in its brands" Kering said in a statement.
Kering gives the example of a merchant that has used Alibaba’s Taobao shopping service to "openly sell" wholesale quantities of "obviously fake Gucci products".
The merchant is said to have advertised a branded handbag for $2-$5 (£1.30-£3.20) per unit - with the price determined by the size of the order which had to be a minimum of 2000 bags. Kering notes that the bags are normally sold for $795 each.
It also highlighted that watches bearing Gucci's trademarked logo had been displayed when users searched for "replica wristwatches" on the site.
This is not the first time Alibaba has been criticised over illegal sales made using its platforms. Its Taobao shopping service had appeared on the US Trade Representative's list of "notorious markets" until 2012 at which point the US authorities recognised it was making efforts to combat the problem.
Speaking at a news conference in Seoul Alibaba chief executive officer Jack Ma said the China-based firm which operates its own online payment system called Alipay is also in discussions with Inc. about cooperating in payment systems and possibly other areas. CEO Tim Cook last week told China's Xinhua News Agency about plans to possibly bring its wireless payment system Pay to China.
Alibaba’s shares slumped 15 percent this year through Friday after China’s consumer watchdog complained about fakes on Alibaba’s malls and investors filed a U.S. lawsuit accusing the company of making misleading statements in its initial public offering last year. The stock is down 0.1 percent at $87.06 at 10:31 a.m. in New York.
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