Taobao wins landmark ruling

The Shanghai People's Court of Fengxian District on July 20 ordered an online pet food shop to pay 120,000 yuan ($17,700) in compensation to Taobao after it was found guilty of selling fake Royal Canin cat food on the e-commerce platform. 

The Shanghai People's Court of Fengxian District orders an online pet food shop to pay 120,000 yuan ($17,700) in compensation to Taobao after it was found guilty of selling fake Royal Canin cat food on the e-commerce platform on July 20. [Photo provided to chinadaily.com.cn]

The ruling is the first of its kind in China.  

The court ruled that the shop damaged the reputation of Taobao and demanded that the defendant, a man surnamed Yao, to pay the compensation within 10 days. 

Zheng Junfang, chief administrative officer of Alibaba, the parent company of Taobao, said that the company would continue assisting law enforcement agencies in weeding out counterfeit products on the e-commerce platform.

Established in 2003, Taobao has more than 500 million registered users and over 60 million visitors each day.

According to the court, Yao started to sell pet food on Taobao in 2015. The online platform and Mars, the multinational company which owns Royal Canin and a number of other pet food brands, later suspected that the cat food sold by Yao might be fake. Their suspicions were later confirmed by lab tests. 

On Oct 12, 2016, Yao was arrested by the police and the lawsuit was filed.

Jack Ma, the founder of Alibaba, said before that his company loses five customers for each fake product that is sold on its online shopping platforms. Alibaba spends 1 billion yuan each year to run a special team of 2,000 people who work to eliminate fake goods from Taobao and Tmall. A total of 880 suspects were caught in 2016. 

In addition to the current lawsuit, Taobao has taken another two online shops to court for selling fake Wuliangye, a well-known Chinese white liquor, and counterfeit Swarovski wrist watches. 

The two cases were being heard in Shanghai and Shenzhen, Guangdong province, respectively. 

He Qi in Shanghai contributed to this story.