If you had an empty parking lot and rented out spaces for a flea market, would you take responsibility for what was being sold there? No doubt you would draw the line at child porn, dope and other illegal goods. But how about the vendor selling fake Rolex watches?

eBay (NASDAQ: EBAY) is facing the same dilemma in the lawsuit brought by Tiffany and Co. (NYSE: TIF) as Zac Bissonette previewed here last week. The trial proceeding have come to a close, and the judge has promised a decision by next month (just in time for Christmas!), one that could challenge eBay's entire business model. If eBay is held responsible for fake Tiffany items sold on its site, look for other often-counterfeited brands to immediately demand the same treatment. Verification processes would, I believe, be both costly and intrusive.

It's no secret that eBay faces constant criticism for providing an avenue for fencing stolen goods, one so prevalent many police departments routinely browse the offerings looking for those taken in local heists. The company cooperates with law enforcement and has taken measures, such as capping weekly item postings, to limit the problem. However, the willingness of the buying public to turn blind eyes to the source of these 'deals too good to pass up' make elimination of the problem next to impossible.

Will the company making the market be held responsible for the actions of those taking part? A quarter of a billion eBay users are waiting for the judge's decision.

Tiffany, eBay in knockdown over knockoffs originally appeared on BloggingStocks on Tue, 27 Nov 2007 14:12:00 EST. Please see our terms for use of feeds.