By Amanda Kaiser
with contributions from Joelle Diderich
 on January 4, 2017
Jack Ma is pushing Alibaba to keep changing for the future.

Alibaba Group said Wednesday it has filed a lawsuit against two merchants for allegedly selling fake Swarovski watches on its Taobao platform and it plans to take other legal actions against counterfeiters.

The e-commerce giant, which has faced a barrage of criticism for the proliferation of fakes on its platforms, claimed that the Swarovski watch case is the first-ever legal action taken by an e-commerce platform in China against counterfeiters. Last month, the U.S. Trade Representative’s Office relisted Alibaba’s Taobao site on its “Notorious Markets” list for 2016, four years after removing it.

Alibaba said it filed the suit with Shenzhen Longgang District People’s Court, claiming 1.4 million renminbi, or $201,555 at current rates, in damages for contract and goodwill violations.

“We want to mete out to counterfeiters the punishment they deserve in order to protect brand owners. We will bring the full force of the law to bear on these counterfeiters so as to deter others from engaging in this crime wherever they are,” said Zheng Junfang, Alibaba’s chief platform governance officer.

Alibaba declined to comment further on the Swarovski case and its plans for other legal action as of press time.

Andrea Durnthaler, head of group public relations and corporate affairs at Swarovski, said the company welcomed the initiative. “We take counterfeiting seriously and we have been steadily increasing our anticounterfeiting efforts worldwide. Swarovski has cooperated with Alibaba on cases against sellers who are offering Swarovski counterfeits on Alibaba platforms, and applauds any steps Alibaba takes to discourage counterfeiters from selling on Alibaba platforms,” she said.

Alibaba said its platform governance team detected one of the fake sellers through its “test-buy purchase program” by buying a watch and having Swarovski authenticate it. The Shenzhen Luohu District police then raided the seller in August and confiscated over 125 counterfeit Swarovski watches, valued at nearly 2 million renminbi, or $287,936.

“We take a holistic and technology-driven approach to IPR enforcement,” said Matthew Bassiur, Alibaba’s head of global intellectual property enforcement. “Big-data analytics enhance our ability to identify and pursue counterfeiters, and make it increasingly difficult for these illicit sellers to hide in the shadows.”

Alibaba said it has enlisted 7,000 employees and volunteers in its fight against counterfeiting. But the company continues to face criticism over the presence of fake products on Taobao.

The American Apparel and Footwear Association and 17 other organizations filed a complaint in October with the USTR, urging the agency to step up its scrutiny of the Chinese e-commerce giant and relist it on the counterfeit watch list. The USTR complied in December, a move that Alibaba protested vigorously.