L’Oréal SA v eBay International AG

“Online platforms cannot turn a blind eye to infringement.”

SHORT DESCRIPTION

The judgment in L’Oréal SA v eBay International AG is a landmark decision that defined the responsibility of online marketplace operators in cases of trademark infringement. The Court of Justice of the European Union clarified that while online platforms may benefit from liability exemptions, such protection is not absolute. Where a platform plays an active role in promoting or facilitating infringing activity, it may be held legally responsible. This case is highly significant for e-commerce, brand protection, and intermediary liability.

FACTS OF THE CASE

L’Oréal SA, a globally renowned cosmetics company, discovered that counterfeit and unauthorised L’Oréal products were being sold on eBay’s online marketplace. Many of these listings involved products intended for markets outside the European Economic Area or products not meant for retail sale.

L’Oréal argued that eBay was not merely a neutral intermediary but actively assisted sellers by optimizing listings, promoting sales, and deriving commercial benefit from the transactions. It claimed that eBay failed to take sufficient steps to prevent trademark infringement despite being aware of repeated violations.

ISSUES INVOLVED

The central issue before the Court was whether an online marketplace operator like eBay could be held liable for trademark infringement committed by third-party sellers. The Court also examined the scope of liability exemptions available to intermediaries under EU law and the extent of proactive duties imposed on platform operators to prevent infringement.

ARGUMENTS OF THE PARTIES

L’Oréal contended that eBay’s involvement went beyond passive hosting. It argued that eBay’s active role in advertising, promoting listings, and assisting sellers deprived it of safe-harbour protection and made it liable for infringement.

eBay argued that it merely provided a neutral platform and that responsibility for infringement lay solely with the individual sellers. It relied on EU intermediary liability exemptions and maintained that it acted promptly when notified of infringing listings.

FINDINGS AND OBSERVATIONS OF THE COURT

The Court held that an online marketplace operator may lose liability exemption if it plays an active role that gives it knowledge of, or control over, infringing content. The Court ruled that eBay could be required to take effective measures to prevent future infringements, including monitoring repeat offenders and suspending infringing sellers.

While the Court stopped short of imposing a general obligation to monitor all content, it made clear that platforms must act decisively once infringement is known.

SUGGESTION / PRACTICAL TAKEAWAY

This decision places a significant compliance burden on online platforms. Marketplace operators must implement robust notice-and-takedown mechanisms and proactive enforcement strategies. Brand owners, on the other hand, are empowered to demand stronger cooperation from platforms in combating counterfeiting and trademark misuse

JUDGMENT

Year: 2011

The CJEU held that online marketplaces can be held responsible for trademark infringement if they play an active role in facilitating infringing sales and fail to prevent repeated violations.