Alibaba sues 'brushing' operator over fake reviews

Chinese e-commerce giant Alibaba is suing a 'brushing' firm for 2.16m yuan ($310,000), alleging it is involved with generating fake reviews for products posted on the online marketplace.

The lawsuit against Shatui.com, whose site is no longer available online, claims the firm connects vendors with people who are prepared to falsify purchases and write fake reviews espousing the benefits and quality of products. The practice, known as 'brushing', can improve reputation and help bump sellers to higher rankings on Alibaba's platforms and ultimately lead to more sales.

Various media reports suggest that Shatui.com had allegedly hired about 5,000 people to write fake reviews for clients.

The court action follows a raid of Shatui.com's office where accounting books were seized, and comes at a time when Alibaba is trying to shrug off criticisms that it isn't addressing the counterfeit problem affecting its platform.

"Alibaba wasn't as stringent about brushing before its IPO but it's really cracked down on the malpractice in the past year," Ray Zhao, a Shenzhen-based analyst at Guotai Junan Securities Co told Bloomberg. "It's quite essential for the company to maintain its credibility and keep the system healthy as they want to attract larger and high quality brands."

Alibaba has been under fire recently following a growing number of complaints that the online marketplace is inundated with counterfeit goods and fake reviews. There was controversy earlier this year when a number of luxury brands withdrew their membership from the International AntiCounterfeiting Coalition following Alibaba's accession to the IACC. Alibaba was later suspended.

Meanwhile, no fewer than 18 trade bodies have requested that the e-commerce site be relisted by the US Trade Representative as a 'notorious market' given its inability to clampdown on counterfeits that "persist" on the platform.

However, Alibaba has fought back having recently launched a new system to fight fakes, which tracks and removes counterfeit products. It is also looking to expand a big data and intelligence sharing scheme to form the Cloud Sword Alliance, which works with Chinese law enforcement authorities to disrupt criminal counterfeit rings. The e-commerce giant claims it has already busted more than 400 counterfeit rackets over a three-month period this year as a result of sharing intelligence with authorities.

The lawsuit against Shatui.com is the firm's latest attempt to prove it is addressing counterfeits. In the past, Alibaba would remove the fake reviews and listings but the lawsuit demonstrates the firm is upping the ante, aware its credibility is at stake as a result of these illicit practices.

Brushing is becoming an increasing headache for e-commerce sites as brands seek to standout from their competitors. The general practice involves the purchase of a good, which is either shipped as an empty box or not shipped at all but registered by the buyer as received. The buyer writes a positive fake review and are later reimbursed by the brushing company. In the meantime, transactions are inflated and the listing is ranked higher on the site thereby boosting genuine transactions.

In China, brushing has become its own booming industry, where firms outsource brushing operators, many of which include tutorial videos on their websites explaining how to brush effectively and exams for their staff, Bloomberg reports. But situations have been reported, says the FT, where genuine buyer's accounts have been hacked and fake orders placed, while brushers have utilised other loopholes to avoid detection from sites algorithms used to pick up the illicit activity.