Catalan police detained the footballer after he was questioned following the woman's formal complaint.
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Alves, who is the most decorated player in the history of football and became the oldest Brazilian player to feature at a World Cup at Qatar 2022, was taken to a police station in the neighbourhood of Les Corts following the incident.
The 39-year-old admitted he had been at iconic city nightclub Sutton on December 30 when the alleged sex crime occurred.
Former Barcelona defender Alves, who now plays for Mexican side UNAM Pumas, pleaded his innocence in a Spanish TV interview after a court confirmed it had opened a formal investigation.
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"I don't know who this lady is," he said.
"I don't know her name, I don't know her, I've never seen her in my life."
Alves had arranged his police interview through lawyers, local media reported.
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The reports also said he would be arrested and fingerprinted as part of a routine procedure.
A spokesman for the regional Mossos D'Esquadra confirmed: "A man accused of an indecent assault at a nightclub in Barcelona late last year has been arrested.
"He has now been taken to court after making a statement to police.
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"It will be up to the court now to decide what measures to take."
A court official confirmed ten days ago: "Barcelona Court of Instruction Number 15 has opened proceedings over an alleged crime of sexual assault following a complaint filed by a woman against a footballer.
"The incident allegedly occurred at a nightclub in Barcelona in December."
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Barcelona-based news site El Taquigrafo claimed it had CCTV footage showing Alves alone for 47 seconds in a toilet at the nightclub with the woman who accused him of sexually assaulting her.
Following the first reports earlier this month, the video was later published by eltaquigrafo.com, after respected Spanish daily ABC had ran the story.