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Amazon hit by ECJ ruling on selling counterfeit products online

Amazon hit by ECJ ruling on selling counterfeit products online

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Amazon could be responsible for selling fake Louboutin shoes at its store, the EU’s top court has said in a ruling that observers say will encourage brands to take advantage of the volume of counterfeit goods sold at the e-commerce giant’s store become, are frustrated.

In cases filed in Luxembourg and Belgium in 2019, Louboutin argued that third parties were selling inauthentic versions of the brand’s distinctive red-soled shoes, a protected trademark, to unsuspecting Amazon shoppers.

Solicited by these lower courts for its interpretation of the law, the European Court of Justice on Thursday issued a preliminary ruling that upheld Louboutin’s concerns that Amazon’s website had not made it clear enough when customers could buy goods from a third-party seller rather than directly from the e-mail Commerce giants themselves.

The case will now be remanded to the lower courts for a final decision. The result is likely to impact how Amazon displays and sells third-party products on its store, given major brands’ long-standing concerns about counterfeiting.

“I think other brands are going to look at this case very closely and say, ‘Hey, maybe we can go the same way,'” said Fabian Klein, intellectual property attorney for Pinsent Masons. “The direction of the ECJ is pretty clear. Life has gotten tougher for Amazon.”

Amazon’s role in handling and delivering the counterfeit products was of particular importance, the ECJ said, as it blurred the line for consumers to know which company they had bought the products from.

Amazon said, “We will review the court’s decision.”

In pursuing its goal as the “Everything Store,” much of Amazon’s product selection growth has been fueled by opening up its marketplace to third parties who own and list their inventory in Amazon’s online stores worldwide. These sellers are responsible for 58 percent of all units sold on Amazon, the company said in October.

“Until now, Amazon has behaved like a department store, allowing unknown third parties to display counterfeit goods on its own shelves, which not only caused great confusion among consumers as to the origin of the goods, but also greatly encouraged the proliferation of counterfeit goods. said Thierry Van Innis, an attorney for Louboutin.

“Amazon will have no choice after this ruling but to adjust its business model and make a very clear distinction between its own goods and those of third parties,” he added.

The company faced similar complaints in the US, where several state-level judges found Amazon responsible for dangerous products sold by third parties.

Amazon has argued that it is a middleman and shouldn’t be held liable. In 2020, in response to complaints from brands, the company created a Counterfeiting Crime Unit made up of “former federal prosecutors, experienced investigators and data analysts” to take legal action against counterfeiters.

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