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L'Oreal sues eBay over counterfeit goods

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eBay is being sued across Europe by the world's biggest cosmetics firm for not trying hard enough to battle counterfeiting. L'Oreal is taking the action in five European countries, including the UK.

The cosmetics giant claims that eBay is profiting from the sale of counterfeit goods and is not doing enough to combat fakes. eBay has argued in the past that it always acts in such cases when notified of the sale of counterfeits.

"eBay is not a victim because it gets a cut from each transaction and advertisement, real or fake," said L'Oreal's head of anti-counterfeiting, Xavier Herfroy, according to French newspaper Liberation. The paper said that L'Oreal had estimated the cost to the company of the sale of counterfeit goods ran into millions of euros.

A spokeswoman for eBay France said that the two companies had been in negotiations since May of this year about the issue, but that the companies could not reach an agreement and that L'Oreal's demands were unreasonable, according to news agency Associated Press.

Action has been taken in France, the UK, Germany, Spain and Belgium over cosmetics that are sold under brands such as Lancôme, Giorgio Armani and Ralph Lauren.

The issue of fake goods for sale on eBay is not a new one. Luxury goods group Louis Vuitton Moet Hennessy and iconic jeweller Tiffany's have both taken action against the online auction site over similar claims.

The online auction of fake goods mirrors an explosion in their sale offline as well. The French Government this week seized almost 13,000 handbags and leather goods which were copies of luxury items that it said were worth €12m. It said that French customs officers had seized €224m worth of fake products in the first half of this year.

French businesses and employees have been particularly active in protecting trademarks and battling fake goods. Industrial lobby group the Union of Manufacturers in France filed a lawsuit last year against eBay seeking compensation for its members because of the availability of fakes on the auction site.

"We think eBay is perfectly capable of policing its site, but they offer to take action only after the fact. They refuse to act pre-emptively," Unifab chairman Marc Antoine Jamet told Reuters last year. "We think they have the IT to manage their sites, to track bank accounts and ownership."

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OUT-LAW.COM is part of international law firm Pinsent Masons.

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