Alibaba Group Holding Ltd (BABA.N) on Thursday alleged that several intellectual property agencies were filing false complaints against vendors on its e-commerce platforms.
The company called for a boycott of these IP agencies, also known as "reputation-protection" firms, which are hired by businesses to help manage their IP rights.
Alibaba singled out Hangzhou Wangwei Technology Ltd, an IP agency, as an abuser of its system for reporting intellectual property thefts, adding that it would no longer process claims made by the firm.
Alibaba's comments come at a time when the Chinese e-commerce company has started cracking down on counterfeiters amid persistent allegations that fake goods are widely available on its sites.
Critics, however, have said that counterfeits remain prevalent and argue the company has not done nearly enough.
The United States in December returned Taobao, China's most popular consumer-to-consumer shopping website, to its blacklist of "notorious marketplaces" known for the sale of counterfeit goods and violations of intellectual property rights.
Alibaba said on Thursday that claims by IP agencies hurt more than a million merchants on the Taobao platform in 2016.
The decision to not process claims from Hangzhou Wangwei was a result of an investigation that showed the firm had withdrawn over 60 percent of its complaints that since 2015 after counter-appeals from merchants.
Alibaba said it would now investigate claims for merit, and give merchants time to respond before penalizing them.
(Reporting by Aishwarya Venugopal in Bengaluru; Editing by Saumyadeb Chakrabarty)