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eBay court victory will not end battle, says lawyer

eBay's latest French court victory against L'Oréal will not end the online auction firm's ongoing battle with luxury brand owners over the sale of counterfeit goods, say lawyers.

The auction firm has faced legal challenges by top brands, including Tiffany's, Hermès and L'Oréal, which have accused eBay of failing to stop the sale of counterfeit goods through its site.

In the latest challenge by L'Oréal, Paris's Tribunal de Grande Instance ruled that eBay was not liable and ordered the two companies to collaborate on combating the problem.

"This round may have gone to eBay, but this will not be the end of the long-running battle with brand owners," said Dai Davis, partner at law firm Brooke North.

According to Davis, eBay is still likely to face challenges from luxury brand owners under European consumer protection laws introduced last year.

"It all comes down to statistics, so L'Oréal's inability to prove a sufficient proportion of L'Oréal branded goods sold on eBay are fake is confined to this case," he said.

Although this particular court was satisfied that eBay is doing enough to keep fake goods off its site, other courts may not agree, said Davis.

eBay claims to be spending $10m a year to keep fake goods off its site, but this should be much greater, according to Davis.

"By eBay's own admission, 10% of branded goods sold through its site are fake, so it should be spending at least 10% of its revenue on countering the problem," he said.


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