Luxury Manufacturers Fighting Counterfeiters in Court, but Battle Getting Tougher

Retail and Consumer Confidence
10/08/2015 22:26

Luxury goods manufacturer Kering, a French conglomerate that includes Gucci and Bottega Veneta, has gone to court against Alibaba. Kering alleges that Alibaba helps fakers sell goods on its websites. The French firm is not the only one to be incensed. Alibaba insists it has extensive measures in place to crack down on counterfeits, and a bitter trial looks likely. The fight against copycats has been long and arduous. Kering’s suit is the industry’s most important in a decade—Alibaba has more than 1 billion product listings and aspires to reach consumers around the world. But its sites are hardly the only places shoppers can find copies. Fake sales are proliferating online, with counterfeiters becoming more technologically adept, more difficult to track and harder to pursue in court.

Last year American border officials nabbed copies that, had they been genuine, would have been worth $1.2 billion, but these were surely a fraction of the counterfeits being peddled. Estimates for the total value of fakes sold worldwide each year go as high as $1.8 trillion. Because it is so difficult to fight both fake-goods websites and the counterfeiting operations behind them—if you shut one factory, another will crop up nearby—luxury-goods firms are increasingly taking aim at the legitimate firms that facilitate the business of counterfeiters, such as auction websites, internet-domain registries and payment processors. Kering vs. Alibaba may be pivotal, but it will not necessarily make the task of catching up with counterfeiters any easier.