Estée Lauder Sues Walmart for Suspected Counterfeit Products
Estée Lauder is suing Walmart, alleging it sold counterfeit beauty products with fake company trademarks on its website, according to a federal lawsuit filed in California on Monday. In the lawsuit, the beauty company claims Walmart advertised, marketed, and sold products that resembled moisturizing creams, eye creams, lotions, parfums, and serums from Estée Lauder and its trademarked private labels Le Labo, La Mer, Clinique, AVEDA, and Tom Ford. These products were sold by third-party sellers on Walmart's online marketplace.
In one example, Estée Lauder shows a photo of its Tom Ford Bitter Peach orange eau de parfum side by side with the counterfeit product, which is designed similarly and has the name "Intense Peach".
Estée Lauder said having these products on Walmart.com are likely to cause confusion for consumers, who are led to believe that the products are genuine Estée Lauder products when they aren't. The lawsuit says Estée Lauder bought and tested some of the products listed on Walmart.com and confirmed they were fakes.
Total Retail's Take: This latest lawsuit represents a growing reality that retailers are increasingly being held accountable for what third-party sellers do on their platforms, and that counterfeit products are becoming easier to create, especially in the beauty category.
Even though the alleged counterfeit products were sold by third-party marketplace sellers, Estée Lauder is suing Walmart, not the individual sellers. That signals that brands expect marketplace operators to take responsibility for monitoring, policing and removing counterfeit listings.
Walmart told CNBC in a statement it requires “all sellers to offer only authentic, lawful merchandise” and it doesn’t tolerate “bad actors” on its platform. It then recalled the message and sent an abbreviated statement to CNBC two hours later that removed that language.
“We are aware of the complaint and have zero tolerance for counterfeit products,” the revised statement read. “We will respond appropriately with the court when we are served.”
