L’Oreal loses legal battle against Ebay in France

By Leah Armstrong

- Last updated on GMT

Related tags Ebay Lvmh

Online auction site Ebay has achieved an important victory against cosmetics brand L’Oreal over the sale of counterfeit perfumes.

Yesterday, Paris’ Tribunal de Grande Instance ruled that Ebay had sufficient measures in place to deter counterfeit sales of L’Oreal products. Judge Elisabeth Belfort said that Ebay had “fulfilled its obligation in good-faith”​ and urged the two companies to work collaboratively in the future.

Ongoing legal battle

This legal battle is the latest in an ongoing struggle between Ebay and luxury goods companies. Ebay has previously been forced to pay compensation to Hermes Intenational and LVMH Moet Hennesy Louis Vuitton SA over a similar issue of the sale of counterfeit goods.

Significantly, this decision will set precedent only in France, since individual countries are free to make their own decisions with regard to anti-counterfeiting measures. L’Oreal has initiated a lawsuit against Ebay in four other European countries, having already been defeated in Belgium, and is awaiting verdicts in the UK, Germany and Spain.

Experts have stated that it is significant that the French courts fell on Ebay’s side, because they are generally said to be the most ‘brand friendly’.

Policing online sales

This lawsuit has, yet again, and has raised the issue of who is responsible for the policing of online sales, a principle which is particularly important to luxury goods markets such as cosmetics.

In this case, L’Oreal had argued that Ebay had acted as more than an impartial sales venue, and had been participant in the sales of these counterfeit products by handling payments and ensuring the delivery of goods.

Ebay stated that it spends $10 m a year trying to keep counterfeit products off its site. Alex Von Schirmeister, general manager of Ebay in France has said “We are confident that ultimately rights holders will realize that Ebay is not the enemy here. 99 per cent of the transactions on Ebay are absolutely legitimate.”

This case has underlined the French court’s preference for collaboration rather than litigation as the best way of resolving cases of counterfeit sales between the auction site and luxury brands. L’Oreal has said it is ‘satisfied’​ with the court’s decision and would work with Ebay in the future to curb counterfeiting.

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