Alibaba filed a lawsuit against Shatui.com, alleging that the website links merchants with people who falsify purchases and write positive comments that can increase the seller’s ranking on the portal. The online retailer is seeking compensation of 2.16 million yuan ($310,000). This lawsuit underlines the rampant spread of fake reviews and purchases on Alibaba’s websites, according to Bloomberg.
Alibaba aims to up its credibility
Alibaba has a love/ hate relationship with the operators who have pushed up its gross merchandise volume for years but now are undermining its credibility. The Chinese online retailer wants to do away with the questionable practices that are criticized by the media and investors, as it is looking to expand its reach.
Ray Zhao, a Shenzhen-based analyst at Guotai Junan Securities Co., stated that the company wasn’t as stringent about brushing before its IPO, but it has really cracked down on the practice in recent years. It has now become significant for the company to keep up with credibility and fair practices, as they will help pull in larger and higher quality brands, notes Zhao.
The offices of Shatui.com were raided and its accounting books seized for allegedly rigging the market, reported Xinhua news agency. Shatui.com is no longer operating online and is redirecting the customers to another e-commerce website. Shatui is not even responding to calls made to the numbers that are posted on the website, notes Bloomberg.
Merchants resorting to unfair practices will see their credit score take a hit and can even see their business shut down, according to Alibaba’s statement.
Using data to crack down on counterfeiting
Alibaba and its law enforcement partners are cracking down on counterfeiting operations. With the help of its big data technology, the Chinese firm has halted 417 counterfeit product rackets, and 332 suspects have been arrested, according to World Trademark Review.
The operation code-named “Operation Cloud Sword” continued from April to July as a joint initiative of Alibaba and the Zhejiang Office on the Fight against IPR Infringement and Counterfeiting. The Chinese firm furnished the intelligence to the agencies to detect and target offline counterfeit production hubs. As a result, storage facilities in 12 provinces and municipalities across China were closed, and the counterfeit goods seized were worth RMB1.43 billion.
Alibaba is not the only company struggling to weed out fakers. Other companies such as Amazon and Facebook are also taking a hit. The former is trying to block fake reviews, while the latter is looking to do away with fake news that has become a big political issue.