Photo of Tiffany jewelry on sale on eBay
Photo of Tiffany jewelry on sale on eBay - 
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KAI RYSSDAL: Here's the caveat emptor question of the day. If you buy something on eBay and it turns out to be a fake, who's fault is it? Tiffany and Co., the fancy jewelry store, is suing the online auction site for not doing enough to stop the sale of knockoffs. A federal judge began hearing arguments today.

And Marketplace's Amy Scott reports, the case could change the rules for online commerce.

AMY SCOTT: Tiffany says the "overwhelming majority" of jewelry bearing its name on eBay is fake. Yet Tiffany's attorney told the court today, eBay has "simply turned a blind eye." Not so, says eBay. The company says it spends more than $10 million a year removing counterfeit goods from its website. EBay encourages trademark and copyright holders to report infringements. Susan Scafidi teaches law at Fordham University. She says if Tiffany wins its lawsuit, eBay and sites like it will have to do a lot more.

SUSAN SCAFIDI: Any online retailer who offers a platform for other sellers now has to think really hard about who's allowed to sell.

Ronald Berk would welcome more policing by eBay. He's CEO of jeweler Judith Ripka. Berk says he's got about half a dozen cases pending against counterfeiters at any one time. But he says it's unrealistic to expect a third party, like eBay, to detect every forgery.

RONALD BERK: As a result of that, we have a team of employees who regularly surf the eBay website, and as soon as they recognize something which we suspect to be counterfeit, we immediately notify eBay, and eBay is pretty responsive.

Tiffany has done its own sleuthing too. In 2003 and 2004 employees scoured the site for fakes. They managed to shut down almost 19 thousand auctions. But the 170-year-old jeweler says automatic screening by eBay would work better and cost less.

In New York, I'm Amy Scott for Marketplace.

Follow Amy Scott at @amyreports