Paying up: The long-running case started after allegations Target was stocking fake MAC cosmetics in its stores.

Paying up: The long-running case started after allegations Target was stocking fake MAC cosmetics in its stores. Photo: Getty Images

Retailer Target will pay global make-up giant MAC Cosmetics $1 million after settling a long running legal case over the discount store’s sale of a range of allegedly fake MAC cosmetics in 2012.

Target, which is owned by Perth-based conglomerate Wesfarmers, will also run corrective advertising to bring to an end the court battle which saw the national retailer accused of selling fake MAC.

The corrective advertising will state that Target could not prove that its MAC range was not fake. MAC, one of the biggest make-up brands in the world, is owned by Estee Lauder.

The court battle against Target, one of Australia’s biggest retailers, was triggered in September 2012 when Target was forced to strip its shelves of MAC - Australia’s biggest-selling prestige cosmetics range - after Estee Lauder claimed the make-up was fake.

The case was quietly cheered on the sidelines by departments stores Myer and David Jones who both have the exclusive license to sell MAC in Australia and were not pleased that a store like Target was advertising its own range of MAC products at vastly reduced prices, sometimes at 40 per cent off.

It is believed Target bought its potentially fake MAC from a US middle man in Texas, with that distributor then linked to an even more obscure make-up wholesaler in Arizona.

Target has also launched its own legal action in the US to discover where its MAC range was originally sourced from.

Two Australian companies that sold the MAC cosmetics to Target have also agreed to pay $10,000 each to MAC.

Aside from the $1 million payment to MAC, Target must also run corrective advertising on the front page of its catalog for a period of 30 days, on its website home page and website cosmetics pages, its Facebook page and through in-store signage in cosmetic sections.

Target will also hand over goods bearing MAC branding and related advertising and promotional material.

In a statement, a spokesman for Target said: “This settlement is not an admission of guilt or liability. The testing required to prove if the products were authentic would have been both costly and time consuming, and so we have taken the commercially prudent decision to settle the matter.

“The new Target management team remain fully focussed on the task of getting the Target business back on track.”

Gregg Marrazzo, senior vice president and deputy general counsel for Estée Lauder said that he was pleased the case had concluded

“This completely vindicates the action taken by MAC Cosmetics to protect consumers and the MAC brand. We will continue to protect our brand and the public by pursuing those that trade in counterfeit products. It is clear that Australian laws put us in a strong position to do that,” Mr Marrazzo said.

“Litigation against the suppliers of the counterfeit products to Target is continuing in both Australia and the United States.”

Fake cosmetics are a huge problem for the make-up and cosmetics industry worldwide, with counterfeit products sometimes containing poor ingredients and compounds or not meeting safety standards in areas such as UV protection.