UK authorities said that eBay is not liable for the sale of counterfeit L'Oreal products on its site, which sparked a lawsuit in 2007 in five different countries, including Germany and Spain.
The French cosmetics company claimed that eBay benefits from the sale of bogus L'Oreal fragrances and creams on its site.
UK courts ruled today that eBay did not have to pay damages to L'Oreal and the company had met proper regulations to combat fake products on its website, calling for the two companies to collaborate further to defeat counterfeiters.
The judge presiding over the case, Justice Arnold, said: "On the contrary, eBay Europe takes active steps to prevent or at least minimise such activities. The fact that eBay could take further steps does not affect this."
Justice Arnold made a number of suggestions for eBay to help deter counterfeiters, including more robust filters and requirements for sellers to disclose their names and addresses.
Ebay said it employs a team of 2,000 people with a budget of $10m per year to take down fake listings from its auctions.
Richard Ambrose, eBay's head of trust and safety, said: "When companies try to prevent genuine items being sold through the internet, they demonstrate that they are out of step with consumers, how they use the internet to shop and, at this time when every penny counts, the importance of shopping around to get the best price.
"Following legal victories for eBay in the UK, US, France and Belgium, we reiterate again that cooperation and dialogue is what is needed, not litigation. Only by working together can we collectively address the issues that concern eBay, rights owners and consumers."
The win for eBay follows a similar victory against L'Oreal in Brussels last year and in France last week. Ebay also won a dispute in Germany when it was sued for selling counterfeit Rolex watches.
L'Oreal rulings in Germany and Spain are still pending.
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