Alibaba’s Landmark Win Against Fake Reviews and Sales

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The e-commerce giant, Alibaba sued a company for fabricating transactions and favourable comments related to online stores and a court in Hangzhou, Zhejiang province ruled out in its favour.

In this one-of-its-kind case, the verdict was decided on Oct 27 and took effect on Nov 11. There was no appeal from the defendant, Hangzhou Jianshi Network Technology within 15 days of the verdict.

In compensation for violating the Law Against Unfair Competition and disturbing the market order of e-commerce platforms, Xihu District People’s Court has ordered it to pay 202,000 yuan (S$41,308) to Alibaba.

Speaking on the matter, Alibaba said to a leading newspaper, “Such a verdict serves as a warning to deter copycats. Only when lawbreakers’ income from the illegal business is all used for compensation and they can no longer make a profit will the legitimate rights and interests of law-abiding companies and consumers be safeguarded.”

Alibaba’s Taobao and Tmall has set up an evaluation system for consumers to evaluate products and services after each purchase, to create a fair, transparent and honest shopping environment.

Customer evaluation has become a very important decision-making tool for people selecting from many products.

The court said Hangzhou Jianshi had established a website in 2014 and accepted requests from online stores to make fake purchases and leave favourable user comments.

From Sept 2014 to March 2016, the company earned 360,000 yuan in brokerage and membership fees after which its operation got suspended by Hangzhou’s market supervision administration.

According to court documents, a total of 3,001 Taobao and Tmall stores asked the company to fabricate transactions and user comments.

Alibaba sued the company in December and requested compensation of 2.16 million yuan for which a hearing was held on Feb 15.

According to Alibaba’s senior legal expert Zhang Yiwen, “Such fake evaluations constitute serious pollution of the evaluation data formed by real consumers, and mislead consumers who rely on the data to make purchase decisions.”

China’s top legislature has recently revised its ‘Law Against Unfair Competition’ saying that e-commerce operators must not dupe consumers by faking user reviews and sales.