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Judge sides with eBay in L'Oreal fake goods case

French court rules online auctioneer can't be held accountable for sales of cosmetic knockoffs in the latest round of a fight against eBay over counterfeit products.

Online auction company eBay has emerged a winner in its latest lawsuit over counterfeit goods.

A French court ruled in favor of eBay in a suit filed by L'Oreal, eBay said on Wednesday. The cosmetics giant sought $4.8 million in damages, accusing eBay of allowing counterfeit goods to be traded on its site. The judge, Elisabeth Belfort, said eBay couldn't be held accountable for sales of fake products on its site. The ruling added that through its anticounterfeiting measures, eBay has "fulfilled its obligations of loyalty to other operators on the market."

eBay has said it spends more than $20 million a year to combat the problem of fake goods and will remove a listing if a company questions its authenticity. But L'Oreal said it thinks eBay could do more to stop the sale of counterfeit items.

"This is a clear legal victory for eBay and important victory for French consumers," said Mary Huser, general counsel for eBay. "We are delighted that eBay's meaningful efforts to fight counterfeits online have been recognized by the court, as has our status as an Internet-hosting provider," she said. "We welcome the invitation to resolve the outstanding matters in an amicable way as we have always believed that cooperation is the best way to fight counterfeits."

This latest lawsuit comes on the heels of similar cases brought against eBay. L'Oreal has the been most persistent, filing several related suits over the past two years. Last year, jewelry designer Tiffany and fashion powerhouse LVMH, parent of Louis Vuitton and Dior, both brought action against eBay over the sale of fake versions of their products. eBay won the Tiffany case but lost the fight with LVMH over counterfeit handbags. The court fined eBay 40 million euros, or about $63 million.

The Software and Information Industry Association, an industry trade group, has also been eyeing legal action against eBay over sellers who push phony software.