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Luxury brands sue Chinese online shopping giant for allowing fakes

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It's no secret that luxury designers see Chinese online stores as a haven for fake goods, but they're now taking concerted action to shut down these less-than-official outlets. Kering, the parent company behind brands like Gucci and Yves Saint Laurent, is suing shopping giant Alibaba for allegedly letting counterfeiters sell their wares in the US and elsewhere. The company did nothing to shut these operations down even when told what was going on, according to the complaint. Kering had tried suing Alibaba last July, but it dropped the case in hopes of hashing out a deal -- clearly, those negotiations didn't get very far.

For its part, Alibaba insists that it has a "strong track record" of working with companies to shut down counterfeits. It sees the lawsuit as "wasted litigation" whose energy is better spent on a cooperative hunt for ripoff peddlers. Whether or not the company is doing enough, the stakes are high. If Kering prevails in court, it may get Alibaba to pay $2 for every bogus product its merchants sell. As you might imagine, that could become very expensive if the retailer doesn't succeed in cracking down.

[Image credit: AP Photo/Kin Cheung]

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