Alibaba sued two merchants on one of its e-commerce platforms over the sale of counterfeit goods, the decision comes after the company was blacklisted by the US government for hosting fake products.

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The Chinese company filed a lawsuit against two sellers of fake Swarovski watches on its ebay-like Taobao platform. The lawsuit was filed at the Shenzhen Longgang District People's Court, and Alibaba is seeking $201,482 in total damages. While the figures may seem small for a company like Alibaba, the company is hoping to deter other sellers from hosting counterfeit items.

"We want to mete out to counterfeiters the punishment they deserve in order to protect brand owners. We will bring the full force of the law to bear on these counterfeiters so as to deter others from engaging in this crime wherever they are," Zhen Junfang, Alibaba Group's platform governance officer, said.

According to the company, a raid by the Shenzhen Luohu District police on one of the sellers on Aug. 10, 2016 led to the confiscation of over 125 counterfeit Swarovski watches valued at nearly $280,000.

Another Swarovski seller on Taobao was also arrested in relation to the raid.

This is the first time for Alibaba or any other e-commerce site in China to take legal action against its sellers. 

Alibaba, which has been heavily criticized over its alleged inability to tackle counterfeit goods, has been taking steps to deal with the issue of fake goods. It employed 2,000 permanent staff and 5,000 volunteers to help find counterfeit products. The company also created data and artificial intelligence to spot fake items.

Alibaba's US rival Amazon is also facing similar problems. Last week, Amazon and Walmart were sued by the founder of rap group Run-DMC for $50 million on claims that that they were selling products that infringed their trademark.

In November last year, Amazon adopted a hardline approach by filing lawsuits against two vendors in an effort to deter other people from listing fake goods on the site.

TagsAlibaba, Amazon, US