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EBay faces liability for trademark infringements and fake ads

A row between eBay and L’Oreal over the sale of counterfeit goods has found its way to the European Court of Justice.

EBAY COULD FIND itself in trouble if it fails to police fake ads on its site, and facilitates instances of trademark infringment.

Europe’s highest court has ruled the eBay may be responsible for actively monitoring that sales are lawful, reports Reuters. It stems out of a complaint by L’Oreal over the sale of samples and the sale of counterfeit goods.

According to the Financial Times eBay has played down the potential impact of the ruling. The company says it offers a “level playing field for all online sellers”.

The European Court of Justice ruled that if eBay participates in any way in an ad where a trademark infringement occurs, then it will not be exempt from liability. Simply allowing customers to display trademark signs is ok though.

The dispute between eBay and L’Oreal dates back to 2007, when the cosmetics company complained to the online auction site about the sale of fake products on its European websites, reports the New York Times.