(Yicai Global) April 22 -- NetEase and Estee Lauder's China unit have dropped their respective cases against each other related to alleged counterfeit make-up being sold on the internet giant's cross-border e-commerce platform Kaola.
The pair have finally buried the hatchet and NetEase has dropped a related defamation case made against the China Consumer Association, the Hangzhou-based company said on Weibo on April 19.
Publicly available information on China Judgements Online shows that Estee Lauder Commercial dropped its own intellectual property infringement suit against Kaola operators including Youmai Network Technology and NetEase Network on March 19.
The row between the pair emerged after a CCA survey last February found that Estee Lauder's 15-milliliter Advanced Night Repair Eye Supercharged Complex Synchronized Recovery sold on Kaola was counterfeit.
Kaola's operators subsequently filed a lawsuit against the CCA, Estee Lauder Commercial and Estee Lauder Companies due to dissatisfaction over the findings, requiring the defendants to delete the reports, issue a public apology and pay CNY21 million (USD3.1 million) in compensation.
The e-commerce platform maintained an aggressive stance on the claims for over one year, publishing statements targeting the CCA and Estee Lauder several times to demonstrate that the ingredients of the product concerned had come from a third-party. Estee Lauder remained largely silent on the matter.
It is quite possible that Kaola got the products at a lower cost from other sources abroad and sold them to consumers in the Chinese market, according to an article from Wang Jian, a professor at Beijing's University of International Business and Economics.
The dispute was essentially a battle over distribution channels between online stores and physical outlets, stemming from conflicts between conventional trading and cross-border retail e-commerce, state-backed newspaper Beijing Business Today reported e-commerce research center 100EC Director Cao Lei as saying following the settlement.
The two parties conflict severely in terms of their interests, he added, and dropping the legal cases will bring some balance to the situation.
Editor: William Clegg