Estée Lauder sued Walmart in California federal court over allegations the big-box retailer sold counterfeit beauty products on its website and didn’t do enough to ensure only authorized and authentic merchandise was offered to consumers.
Estée Lauder said it purchased, inspected or tested a number of products sold on Walmart.com that used the Le Labo, La Mer, Clinique, Aveda, Tom Ford and Estée Lauder trademarks but were determined to be fakes, according to the suit, filed Monday.
The products include counterfeit versions of Estée Lauder’s Advanced Night Repair serum, a Le Labo fragrance, a Clinique eye cream, a La Mer lotion, an Aveda hair brush and a Tom Ford fragrance.
xemplars of the Estée Lauder Accused Products
U.S. District Court Complaint
It’s unclear when Estée Lauder bought and tested the products but the suit comes several months after CNBC published an investigation into counterfeit beauty products and fraud on Walmart.com.
Two of the counterfeit products cited in CNBC’s investigation — Estee Lauder Advanced Night Repair serum and Clinique Smart Clinical Repair Wrinkle Correcting Eye Cream — were also mentioned in Estée Lauder’s lawsuit. It’s unclear if the products cited in the suit are the same counterfeits CNBC provided to Estée Lauder.
In response, Walmart initially 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.”
Estée Lauder didn’t return a request for comment.
Exemplars of the Clinique Accused Products
U.S. District Court Complaint
While the products were sold by third-party sellers on Walmart’s online marketplace, Estée Lauder said the company played an active role in facilitating those sales to shoppers in its suit. The legacy beauty company called Walmart’s conduct “extreme, outrageous, fraudulent … despicable and harmful.”
The counterfeit products were promoted and advertised to shoppers on the platform, Estee Lauder’s trademarks were used in search engine optimization tools to drive traffic to the listings and Walmart profited from the sales, the complaint stated.
Further, “a person shopping on Walmart.com would have reasonably believed that Walmart, and not third-party sellers, was the seller” of the item, which could have caused confusion among shoppers, the complaint states.
At the heart of CNBC’s investigation into Walmart’s online marketplace was the steps the company took, or didn’t take, to vet its third-party sellers and the products they were offering to prevent fraud and the sale of fakes on the platform.
Read More: Estée Lauder sues Walmart, alleging sale of counterfeits
