Swiss luxury watch brands, Omega, Longines and Rado, have filed a lawsuit with a Beijing court against leading Chinese e-commerce portal Taobao for selling counterfeit watches on its website.
The three watchmakers claim that they have found fake watches being sold on Taobao, and they demanded that the portal should stop selling the watches of these three brands in the future if priced lower than 7,500 yuan ($1,162.58) to prevent fake ones from being sold.
Omega claimed that the average price for a genuine Omega watch is around 37,000 yuan, but some Omega watches on Taobao are priced at only a few hundred yuan.
Another Web portal, qianlong.com, was also sued for displaying advertisements for counterfeit watches on Taobao.
The three Swiss companies have asked for a total of 2 million yuan in compensation from the two defendants.
A representative of Taobao said the sellers on Taobao have been reminded that it is their legal obligation to offer genuine products when they get registered on Taobao. The portal also deleted some problematic links after they were informed by the three companies, a People's Daily Online report said Thursday.
A Taobao statement e-mailed to the Global Times said that the company thinks it is "unfair" to use a price tag (7,500 yuan) as the only standard to judge whether a product is genuine or not.
Huang Hui, a lawyer with Bejing Wanhuida Law Firm, told the Global Times that though it is not possible for e-commerce portals to examine and verify every single information posted on their websites, they are still obliged to delete all problematic links after they are informed about the problems.
But the low-priced watches of the three brands were still available on Taobao Thursday, with prices as low as 200 yuan.
Legal disputes between luxury producers and e-commerce websites are getting common these days.
Earlier this year, Taobao was sued by fashion company Eland for the sale of counterfeit products on its website. The court ruled against Taobao in the lawsuit.
"The cost of online sales is much lower. Even prices of genuine products sold online are still much lower than those sold in a flagship store, thus online sales of luxury goods are gaining popularity these days," said Feng Lin, an analyst with the China e-Business Research Center.
"But supervision is a big problem for e-commerce websites. Counterfeit products are even more rampant with some group buying websites," said Feng.
Taobao said that starting March this year, it began to randomly examine products sold on Taobao to prevent unauthorized and counterfeit products from being sold. And it has dealt with 47 million infringement cases so far this year.