eBay may be liable for fake goods sold on siteEU court rules on online auction sites

12 July 2011

eBay may be liable for fake goods sold on site

The European Court of Justice has today ruled that eBay, the popular online auction website, and other online marketplaces, could be liable for counterfeit goods sold on its websites.

In the ruling, the court stated that any online retailer who played an 'active role' in promoting counterfeit goods could be held liable for trademark violations. 

It added that national courts had the right to halt infringements and to prevent future infringements where necessary, though actions should be 'effective, proportionate and dissuasive, and must not create barriers to legitimate trade'.


eBay and L'Oreal at loggerheads

The ruling is the latest development in an ongoing battle between eBay and the cosmetics brand L'Oreal. L'Oreal argues that eBay's practice of purchasing search engine keywords, which target its trademarks and products, effectively promotes the wares of trademark infringers. 

It also wishes to prevent products intended for markets outside the EU, such as the USA or Asia, being imported via the online auction sites - a practice known as 'parallel importing'.

In May 2009 the UK High Court ruled in favour of eBay in regards to joint liability with online sellers that L'Oreal had deemed to have infringed on its trademarks. However, the High Court asked for guidance on European trademark law from the European Court of Justice. The case will now return to the High Court.

An eBay spokesperson said 'the judgment provides some clarity on certain issues, and ensures that all brands can be traded online in Europe'.

What does this mean for consumers?

John Holmes, Principal Economist at Which?, said: 'We welcome any steps to prevent counterfeit goods reaching consumers. However, genuine goods supplied to consumers under 'parallel imports' should be freely available within the EU. Too often standards are imposed on retailers that maintain, in effect, exclusive territories through 'selective distribution' systems. This can prevent consumers deciding from whom they should buy and restrict competition'.

Top tips for consumers

1. Genuine goods - check that the website you're purchasing from sells genuine stock.

2. Seller's profile - if shopping on auction sites like eBay, check the seller's feedback left by other customers. Find out if they're a private or trade seller as your rights paying by card and under the Sale of Goods Act will differ if they're a private seller. Check the seller's terms of sale.

3. Protective payment methods - pay trade sellers by credit card where possible. You have for goods over £100 but not more than £30,000. When purchasing goods from private sellers use an .

4. Purchase meets description - understand your rights under the Sale of Goods Act. If the item you bought is not 'as described', 'of satisfactory quality' or 'fit for purpose' you may have a case to claim.

5. Report rogue traders - if the seller breaches their contract with you and does not resolve the issue, consider reporting them to Trading Standards or, as a last resort, taking them to a small claims court.

For help, read our guide to and how to sell goods safely on eBay.

How to follow the latest Which? Tech news

Are you a Twitter user? Follow WhichTech on Twitter for regular tech tweets.

Prefer RSS? Don't miss a thing with the Which? tech RSS feed

For just the main headlines in newsletter form, sign-up to our weekly Which? tech email.

Apple iPad 2 3G data plans compared - find the best 3G plan for your iPad
Best Android tablets round-up - we look at the best iPad alternatives around
Best cheap laptops for under £500 - find the best laptop deals