THE BOTTOM LINE
- Platform Immunity Reinforced: An online marketplace is not directly liable for trademark infringement by its third-party sellers, even if it automates advertising for those sellers’ products on sites like Google.
- User Perception is Key: Following recent EU case law, the decisive factor is whether a “normally informed and reasonably observant user” would perceive the platform itself as the seller. Clear “Sold by” information is a powerful defense.
- The “Hosting Safe Harbor” Stands Firm: Platforms that maintain a neutral, automated, and passive role in storing seller information are protected from liability under the Digital Services Act (DSA), even if they provide extensive, automated marketing tools.
THE DETAILS
In a significant decision for the e-commerce sector, The Hague Court of Appeal has sided with the global online marketplace Fruugo.com in a trademark infringement dispute brought by automotive giants Audi and Volkswagen. The car manufacturers argued that Fruugo was liable for the sale of counterfeit branded goods (such as wheel caps) by third-party retailers on its platform. Their claim was twofold: first, that Fruugo was directly infringing their trademarks by advertising and offering the goods, and second, that it was unlawfully facilitating the sellers’ infringement. The Court rejected both arguments, providing crucial clarity on the line between a platform operator and an active seller.
The court’s central reasoning on direct infringement hinged on the perspective of the average online shopper. Applying principles from the European Court of Justice’s landmark Louboutin v. Amazon ruling, the judges analyzed whether a reasonably observant user would believe Fruugo itself was selling the products. Despite Fruugo’s prominent branding across the site and its role in processing payments, the court found the platform did enough to distinguish itself from the third-party sellers. Over time, the product listings consistently included fields like “From,” “Brand,” or, most explicitly, “Sold by,” followed by the retailer’s name. This was deemed sufficient to inform the user that they were buying from a third party, not Fruugo. Similarly, the court concluded that the third-party sellers—not Fruugo—were the legal “advertisers” on search engines, as they control the product data and keywords, even though Fruugo’s system automates the ad placement and payment.
Furthermore, the court upheld Fruugo’s defense under the “hosting safe harbor” provisions, now enshrined in the EU’s Digital Services Act (DSA). This legal shield protects intermediary services from liability for the content they host, provided they play a “merely technical, automatic and passive role.” Audi and Volkswagen argued that Fruugo’s extensive services—including optimizing and promoting listings via paid search engine ads—constituted an “active role” that disqualified it from this protection. However, the court disagreed, finding Fruugo’s activities to be automated and not involving knowledge or control over the specific content of individual listings. This decision reinforces that providing sophisticated, automated tools to sellers does not, by itself, strip a platform of its safe harbor protection.
SOURCE
Gerechtshof Den Haag (The Hague Court of Appeal)
