In its lawsuit, Kering SA alleged Alibaba of making profits from the sale of goods that infringe on its brands, including Gucci and Yves Saint Laurent. The suit was filed on Friday in the U.S. District Court in New York. Alibaba claimed the complaint "has no basis" and the company will fight it vigorously.
It is notable that Kering withdrew a similar complaint against Alibaba under an agreement to cooperate on fighting fakes. In its new complaint, Kering has accused Alibaba of using algorithms that help customers find counterfeits to buy, highlighting the challenges in policing third-party sellers that have also drawn criticism from consumers, government watchdogs and investors.
"With every one of these lawsuits, it just shows that they need to review how they approach fakes and their algorithms," said Mark Tanner, founder of Shanghai-based research and marketing agency China Skinny. "The government is also stepping up scrutiny."
The shares of the company have plunged slumped 15 percent this year after China's consumer watchdog complained about fakes on malls of Alibaba. Some investors filed a lawsuit in the US accusing the company of making misleading statements in its initial public offering last year.
Lawsuits are "one of the concerns, and we look at whether it will impact the financials," said Victoria Mio, a fund manager at Robeco Hong Kong Ltd.
"We continue to work in partnership with numerous brands to help them protect their intellectual property. Unfortunately, Kering Group has chosen the path of wasteful litigation instead of the path of constructive cooperation," Alibaba spokeswoman Melanie Lee said.
Kering has accused Alibaba of knowingly encouraging, assisting and profiting from the sale of counterfeits.
According to the latest lawsuit, bags bearing Gucci's trademark were being sold on an Alibaba platform for as little as $2 apiece, while the price of the authentic bag is $795.