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A French court has ruled in favor of eBay in a case brought cosmetics company L'Oreal over the sale of counterfeit goods on the site.

L'Oreal was suing eBay for $6.97 million (3.5 million euros) claiming the company was not doing enough to prevent the sale of counterfeit goods posted on its auction and sale sites.

The Paris court said eBay had "fulfilled its duty" and said "preventing the sale of counterfeit goods on the eBay platform encounters major difficulties when it comes to perfumes and cosmetics."

The two parties have agreed to use legal mediation to resolve the counterfeiting issue. The court has scheduled a hearing for May 25 to hear the result of the mediation process.

"Today, 99% of all items listed on eBay have no suspicion of counterfeits," said Mary Huser, deputy general counsel for eBay.

"We welcome the invitation to resolve the outstanding matters in an amicable way, as we have always believed that cooperation is the best way to fight counterfeits. Ongoing dialogue and collaboration, rather than litigation, is the only way to address these complex issues, which is in everyone's best interests."

eBay won a similar case brought by L'Oreal last year in Belgium.