Estée Lauder Sues Walmart Alleging 'Despicable' Sale of Counterfeit Beauty Products

Why It Matters

The lawsuit underscores the growing legal risk for e‑commerce platforms that host counterfeit goods, potentially reshaping marketplace liability standards and prompting stricter regulatory action.

Key Takeaways

• Estée Lauder sues Walmart over counterfeit beauty listings.
• Counterfeits sold by third‑party sellers on Walmart.com.
• Walmart accused of actively facilitating fake product sales.
• Case highlights marketplace liability amid growing e‑commerce.
• Shop Safe Act could shield platforms if passed.

Pulse Analysis

The Estée Lauder versus Walmart dispute spotlights a persistent challenge in online retail: the infiltration of counterfeit luxury goods into massive marketplaces. While Walmart positions its third‑party platform as a growth engine, the brand’s lawsuit alleges that the retailer’s vetting processes were insufficient, allowing fake La Mer serums and Clinique creams to reach consumers. By purchasing, testing, and documenting these items, Estée Lauder aims to hold Walmart accountable not just for the sellers’ actions but for the retailer’s alleged role in promoting and profiting from the fraud.

Legal scholars note that the case revives debates sparked by the 2010 Tiffany v. eBay decision, which limited platform liability unless they knowingly facilitated infringement. Estée Lauder’s complaint argues that Walmart had actual knowledge of the counterfeit listings and failed to act, a higher threshold that could pierce the usual safe‑harbor protections. The broader legislative backdrop includes the bipartisan Shop Safe Act, which seeks to grant platforms immunity if they meet stringent anti‑counterfeit standards. Although the bill has stalled repeatedly, heightened scrutiny from high‑profile suits may pressure Congress to revisit its provisions.

For Walmart, the stakes are both reputational and financial. The marketplace now accounts for a sizable share of its revenue, contributing to a recent $1 trillion market‑cap milestone. However, continued exposure to counterfeit products could erode consumer trust and invite further litigation, potentially prompting tighter seller verification and more aggressive policing of listings. Competitors like Amazon and eBay face similar pressures, suggesting an industry‑wide shift toward stronger safeguards, which could reshape the dynamics of online retail and influence future platform‑brand partnerships.

Estée Lauder sues Walmart alleging 'despicable' sale of counterfeit beauty products

By Gabrielle Fonrouge · Published Tue Feb 10 2026 2:54 PM EST (updated 2 hours ago)

• Estée Lauder sued Walmart over allegations that counterfeit La Mer, Le Labo, Clinique, Aveda and Tom Ford beauty products were listed on Walmart’s online marketplace.

• Although the products were sold by third‑party sellers, Estée Lauder claims Walmart played an active role in facilitating those sales, calling its conduct “despicable.”

• The lawsuit follows a CNBC investigation that earlier exposed fraud and counterfeit goods on Walmart.com, including fake Estée Lauder and Clinique items.

• Walmart previously told CNBC that “trust and safety are non‑negotiable for us” and that it enforces a “zero‑tolerance policy for prohibited or non‑compliant products.”

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Walmart Inc. signage during the company’s listing at the Nasdaq MarketSite in New York, U.S., on Tuesday, Dec. 9, 2025.

Michael Nagle | Bloomberg | Getty Images

Estée Lauder filed a complaint in a California federal court alleging that Walmart allowed counterfeit beauty products to be sold on its website and failed to ensure that only authorized, authentic merchandise was offered to consumers.

The company says it purchased, inspected and tested a number of items sold on Walmart.com that bore the Le Labo, La Mer, Clinique, Aveda, Tom Ford and Estée Lauder trademarks but were determined to be fakes. The counterfeit items include:

• Estée Lauder Advanced Night Repair serum

• A Le Labo fragrance

• Clinique eye cream

• La Mer lotion

• An Aveda hair brush

• A Tom Ford fragrance

It is unclear when Estée Lauder bought and tested the products, but the suit comes months after CNBC’s investigation into counterfeit beauty products and fraud on Walmart.com. Two of the counterfeit products cited in that investigation—Estée Lauder Advanced Night Repair serum and Clinique Smart Clinical Repair Wrinkle‑Correcting Eye Cream—were also mentioned in the lawsuit. Whether the exact same items were involved in both the investigation and the suit has not been confirmed.

Estée Lauder and Walmart did not immediately respond to requests for comment.

While the products were listed by third‑party sellers on Walmart’s marketplace, Estée Lauder alleges that Walmart actively facilitated those sales. The legacy beauty company described Walmart’s conduct as “extreme, outrageous, fraudulent … despicable and harmful.”

According to the complaint, the counterfeit products were promoted and advertised to shoppers on the platform; Estée Lauder’s trademarks were used in search‑engine‑optimization tools to drive traffic to the listings; and Walmart profited from the sales. The complaint further states that a shopper on Walmart.com would reasonably believe Walmart—not the third‑party seller—was the seller of the item, creating confusion.

CNBC’s investigation highlighted the steps (or lack thereof) Walmart took to vet its third‑party sellers and the products they offered, aiming to prevent fraud and the sale of fakes on the platform.

In its filing, Estée Lauder said Walmart promoted the “reputation and professionalism” of the sellers allowed on its marketplace but did “very little to ensure that only authorized and authentic products are available” for sale. The complaint quotes:

“This is readily apparent given the [counterfeits] were permitted to be sold on Defendants' website despite their stated careful selection process in who they choose as a Marketplace seller/partner. Accordingly, Defendants know or had reason to know that the sellers they partnered with and ‘regularly reviewed’ were selling products which infringe upon the Estée Lauder Marks.”

Walmart’s online marketplace has become a key part of its strategy to grow profit faster than sales and better compete with rivals such as Amazon. The rapid growth of the platform helped propel Walmart to a $1 trillion market‑cap last week, placing it among an exclusive club of technology‑focused companies.

However, the strategy carries risks. CNBC’s investigation revealed that offering counterfeit, potentially dangerous products through third‑party sellers could expose Walmart to liability and erode the customer trust central to its brand.

Since a 2010 court ruling stemming from Tiffany’s lawsuit against eBay over counterfeit goods, it has been difficult for brands to hold platforms accountable for counterfeit sales. Brands often avoid lawsuits unless the conduct is extreme or flagrant, according to experts.

The bipartisan Shop Safe Act, a federal bill intended to curb the sale of fakes on online marketplaces, seeks to address issues raised by the Tiffany v. eBay ruling by incentivizing platforms to better vet sellers and their products. If platforms comply with certain anti‑counterfeiting measures, they could be shielded from liability when a seller offers a fake product.

Although many brands support the legislation, it has failed to pass at least three times, partly because Walmart and other marketplaces such as Amazon, Etsy and eBay have lobbied against aspects of the bill, according to two U.S. Senate aides who spoke on condition of anonymity.