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Julia Wilkinson AuctionBytes Blog
Covering auctions, collectibles and marketplace selling.

Julia Wilkinson is Editor of the AuctionBytes Blog and is author of the "eBay Price Guide," "eBay Top 100 Simplified Tips and Tricks," "My Life at AOL" and numerous ebooks about selling online. You can also find her writing on Yard Salers.
Tue July 6 2010 21:10:03

Does eBay Effectively Fight Shill Bidding?

 By: Ina Steiner
Sponsored Link
When eBay defended itself in court from accusations of facilitating shill bidding on its live-auctions platform, did it call into question its ability to detect and eliminate shill bidding on its core eBay.com marketplace?

Today's AuctionBytes Newsflash newsletter describes a 2007 lawsuit against eBay that claimed it engaged in racketeering when it allowed auction companies to place floor bids on the eBay Live Auctions platform when those auction companies did not hold live, physical auctions. The plaintiffs argued that floor bids from those particular auction companies were shill bids. The case was settled after plaintiffs failed to get certification for a class action, but their law firm is still investigating - see Wednesday's news story.

The challenges the plaintiffs faced included the following: the primary plaintiff was a business, not consumer; and the Judge believed damages would vary for each class member - she did not believe the plaintiffs' argument that shill bidding drove prices 20% higher across the board. And in the beginning the Judge made it clear she did not like the complexity that RICO added to the case.

Complicating matters was eBay's allegation that one of the plaintiffs herself engaged in shill bidding as a seller on eBay.com. The plaintiff's lawyer, John Balestriere, said the plaintiff and the firm deny this "baseless assertion of supposed misconduct," and noted that the charge was only made after the plaintiff sued eBay.

There can be legitimate reasons why eBay sellers bid on each other's items, and the case was never fully investigated or defended.

But what really strikes me about eBay's allegation is that, if it was true (and I'm not in a position to know either way), it would be an indication that its shill-bidding detection system on its core platform was not effective in detecting that activity. eBay never detected the plaintiff's alleged shill bidding until they specifically looked at her account after she sued them. (The industry's anti-shill bidding crusader is going to have a field day with that one).

The law firm is continuing its investigation of shill bidding on eBay Live Auctions, even though eBay closed the platform at the end of 2008. Take a few moments to read the article, and post a comment if you have an opinion.
Comments (56) | Permalink
Readers Comments

Does eBay Effectively Fight Shill Bidding?   Does eBay Effectively Fight Shill Bidding?
by: Patricia This user has validated their user name.
       
Tue Jul 6 21:37:46 2010
Hah!  Where's Philip?
Does eBay Effectively Fight Shill Bidding?   Does eBay Effectively Fight Shill Bidding?
by: nobody
       
Tue Jul 6 21:44:36 2010
LMHO!!!!!!!!!!!!!!!!!!!!!!! :D :D :D

Thank you, Ina, I needed a good laugh!

You look great in your new picture too! :)

Have a great evening, and thank you again! :D
Does eBay Effectively Fight Shill Bidding?   Does eBay Effectively Fight Shill Bidding?
by: Raotflmao
       
Tue Jul 6 21:48:54 2010
No,and they have made it nearly impossible for other buyers and sellers to tell if shill bidding is going on.  Why control shill bidding? It is not in ebays best interest (money from fees for inlated sales) to control it.  I have personally turned in a seller 3 times a couple of years ago, ebay shut her down along with 3 other id's she was using.  Now she is back using the same old ID's.  I contacted ebay with the past info I had sent, they claim that after 90 days the info is gone and they can no longer refer back to it...also they find no wrong doing..very convient and IMHO a bald faced lie....I can pull up emails from 5 years ago....
Does eBay Effectively Fight Shill Bidding?   Does eBay Effectively Fight Shill Bidding?
by: Lawrence A Dickerson
       
Tue Jul 6 21:49:07 2010
Ever since I began participating on eBay as a buyer only,eBay has been rife with shill bidding especially since the bidder's anonymity was protected.Every time I discovered  it happening I reported it receiving a canned reply that there was no way to determine whether or not it was indeed occurring.

That claim is a pile of camel dung,pure sweet and simple.It doesn't take a brain surgeon to follow those  types by the FB numbers even though the names change.I refuse to bid when I suspect shill bidding and I no longer report it.EBay is well aware of who,when and why it occurs.
Does eBay Effectively Fight Shill Bidding?   Does eBay Effectively Fight Shill Bidding?
by: Hardrock Rules
       
Tue Jul 6 22:57:06 2010
Hey Phillip Cohen, here is an opportunity to state your case for this Blog ; )

Remember I agree with you there are shilling sellers !
Does eBay Effectively Fight Shill Bidding?   Does eBay Effectively Fight Shill Bidding?
by: eBuyer Feedback This user has validated their user name.
       Web Site
Wed Jul 7 00:47:55 2010
eBay does a terrible job of detecting shill bidding and it doesn't benefit them to do anything about it.  Because of bidder anonymity and general distrust of sellers there will always be a perception of shill bidding on eBay regardless of how well eBay does control it.  In a recent case ( http://www.thesun.co.uk/sol/homepage/news/2939338/Ebay-seller-faces-50
k-fine-for-phoney-bids.html ) eBay only became aware of a shill bidder after a government agency investigated the seller for selling misdescribed items.  If he didn't lie about the mileage of his vehicle he'd probably still be selling on eBay today.

As a developer, over the years I've come across several obvious cases where the buyer and seller were the same entity.  The only time I've seen eBay act was when a buyer (employee) did a BIN of their company's (the seller) product.  The buyer left one positive feedback comment which got the company account suspended for feedback abuse.
Does eBay Effectively Fight Shill Bidding?   Does eBay Effectively Fight Shill Bidding?
by: Greg
       
Wed Jul 7 00:49:14 2010
It's about mid-afternoon on Wednesday in Australia right now, which is where Philip lives. He'll be here soon.
Does eBay Effectively Fight Shill Bidding?   Does eBay Effectively Fight Shill Bidding?
by: Mercy the Mingless This user has validated their user name.
       
Wed Jul 7 01:34:47 2010
Ebay's much ballyhooed shill bidding ''technology'' is as ineffective as their latest magic trick, divining a ''pattern'' of bad buyer behavior using an ''algorithm''.

Both are made of equal parts of crap.
Does eBay Effectively Fight Shill Bidding?   Does eBay Effectively Fight Shill Bidding?
by: 865372
       
Wed Jul 7 02:58:04 2010
I never once bid on a single thing since they made bidders anonymous. It is a scam, a tool to scam, or way to cover up a scam pure and simple!

It's only one racket out of many, one small part in the life of a criminal enterprise. They are gaming and scamming every last little thing and way they can from the looks of things. Think about it. Glitches that always favor ebay and paypal... People aren't even getting what they are paying for. You don't all think all that is a racket? Covered up (also propagated with) with lies, excuses, censorship, changing policies, and diversionary bs?

Don't forget the other shilling going on either - the paid goon squad on ebay forums, and elsewhere (as we have seen cough cough!). They aren't fooling anyone. That kind of flim-flam scumbag practice has cost them as much bad word of mouth as anything else.

It's still alot of fun watching them go down slowly, shamefully, and certainly.
Does eBay Effectively Fight Shill Bidding?   Does eBay Effectively Fight Shill Bidding?
by: Lisa
       Web Site
Wed Jul 7 03:37:19 2010
i never understood why ebay  made bidder ID private. that was half the fun! :(
Does eBay Effectively Fight Shill Bidding?   Does eBay Effectively Fight Shill Bidding?
by: cool
       
Wed Jul 7 06:42:23 2010
I wish they would shill some of my auctions. I can barely get a view let alone one bid!
Does eBay Effectively Fight Shill Bidding?   Does eBay Effectively Fight Shill Bidding?
This user has validated their user name. by: Ed Gadfly
       
Wed Jul 7 06:42:57 2010
Uncle Griff said that eBay doesn't condone shill biding.

Hopefully we can see Uncle Grift testify to that on the stand in court someday.

Yeah Griff, you and John and some of the others ought to be judged, and if you are found guilty the State of California should put you guys in a box with iron bars for a while.

It does not make for good community values to allow people to cheat, lie and steal.
Does eBay Effectively Fight Shill Bidding?   Does eBay Effectively Fight Shill Bidding?
by: Hardrock Rules
       
Wed Jul 7 08:47:18 2010
"i never understood why ebay  made bidder ID private. that was half the fun! :("

I can tell you the truth here, some sellers offer such bargains on auctions, that many many buyers are repeat customers, many are resellers themselves online, or brick and mortar and they are repeat bidders trying to snag deals.

That is the truth, so when a ebayer who does not understand that lots of thse bidders are repeat buyers and resellers themselves looking for rock bottom bargains, they would turn these ID's in needlessly to ebay for suspected shilling.

Lots of repeat bids are NOT shills, yes some sellers liklely do have sophisticated network of shills to artificially enhance the true price their item would bring, but not ALL sellers who start out at low start no reserve auctions do so cause they ge shills. I discussed that point on here with Mr.Cohen before

Now don't get me wrong, Phil is right there are lots who do, as I told him on a blog I got competitors with lousy DSR's etc that get $20 to $30 from me for product I listed for many years and am Top Rated, and I know it is impossible for me to get that much, so I am almost certain they are shilling, and I have reported a few myself

Remember it DOES EXIST ! But not all sellers who start an item out low price are engaged in that illegal activity, and some sellers sell such bargains they get many repeat buyers and resellers bids it might look like that bidder bids all the time, bu it is NOT a shill
Does eBay Effectively Fight Shill Bidding?   Does eBay Effectively Fight Shill Bidding?
by: LadyM
       
Wed Jul 7 09:24:11 2010
I report every instance of shill bidding and feedback abuse I run across on eBay... for what good that does.  Just last week I was on the phone to Trust & Safety about a shill bidder.  They saw their bid pattern, ''filed their report'' and did nothing else.

In Feb., I reported a seller for blatant feedback abuse.  Their punishment was to lose their TRS status for a month or so.  I contacted Griff last week about the same seller as the abuse still continues.  He forwarded my email to T&S where, once again, they did nothing.  Their response: ''I have reviewed this account and I see that we have taken action against them in the past for violations of our policies and that no further action is necessary at this time. If this member violates our policies in the future we will address it at that time.''

HELLO!  Is today and every day forward not the future?  But they were quick to give them TRS status again!  

As it turns out, there are not one, but TWO sellers sharing these shill bidders.  I responded to both T&S and Griff that their findings were incomprehensible.  One week of silence, so I sent copies of my findings to Ina, and will gladly share them with anyone who wants them.

eBay has no financial motivation to investigate.  Shill bids end in higher FVF.  Until eBay is faced with a class action, they won't be forced to rectify the problem.  So the question becomes: legally, what is eBay's liability?

eBay was notified of illegal activity and did nothing.  Buyers paid more for items because of eBay's failure to act.  And there IS a contract between eBay and its users, which under the law is CONSPIRACY.  With hundreds of documented cases of zero feedback buyers making private purchases through eBay from 2 companies registered overseas, I smell RICO.  

Millions on shill protection?  BULL.  They can pay me to clean house for a hell of a lot less.  For a few million, they could hire an entire crew of qualified American workers do to what they're not willing to do themselves.
Does eBay Effectively Fight Shill Bidding?   Does eBay Effectively Fight Shill Bidding?
by: second chance offer
       
Wed Jul 7 11:05:36 2010
One of the reasons ebay started hiding bidders names is because scammers many from other countries would watch autions with lots bidders and when the auction ended they would contact the losing bidders with fake second chance offers. They would get them ro send money and never of course send the product.

In the art section losing bidders were contacted by chinese art copiers and offered the copied product at a lower price.
But that could have been handeled differently. They fixed one problem and created another.

Ebay always had the ability to see who the bad buyers and sellers were by  feedback patterns and money transactions, They could do that now much easier with  all trnsactions going through paypal.
Does eBay Effectively Fight Shill Bidding?   Does eBay Effectively Fight Shill Bidding?
by: one or the other
       
Wed Jul 7 11:26:41 2010
they would contact the losing bidders with fake second chance offers

Instead hiding and facilitating.
They should of just gotten rid of the second chance offers, they are practically useless anyway.
Does eBay Effectively Fight Shill Bidding?   Does eBay Effectively Fight Shill Bidding?
by: Patricia This user has validated their user name.
       
Wed Jul 7 13:04:54 2010
Once again the fox guards the henhouse!  Years ago when I was on one of the community watch teams we turned in a ring of shill bidders - bidding on each others auctions.  Nothing happened.  Apparently Ebay simply wanted to boast that they were doing all they could to stem shill bidding....but why should they?  Shills make the price go higher and that means larger FVF's for Ebay.  Total transparency would help (not solve but help) the problem - but we see what direction Ebay went on that matter!
Does eBay Effectively Fight Shill Bidding?   Does eBay Effectively Fight Shill Bidding?
by: Mickey
       
Wed Jul 7 14:44:48 2010
Who here thinks they know a way to catch every shill? The dumb ones, sure. The mass offenders, yeah. But halfway smart & discrete? Nah. Oh, and any method I'll accept must return NO false positives. (Just this morning a bidder accused me of "bidding your own auction" because of the weird bidding pattern of a couple of complete strangers.)

A solution.... Limit bidding to one bid per bidder on any listing & no retractions.
Does eBay Effectively Fight Shill Bidding?   Does eBay Effectively Fight Shill Bidding?
by: unusual1 This user has validated their user name.
       Web Site
Wed Jul 7 15:18:33 2010
@ second chance offer
"They could do that now much easier with  all trnsactions going through paypal."
Not so -- I never use paypal to sell or buy. Many sellers are losing bids and done know or care that than can accept other types of payments.  They have to adjust their acceptance page. I don't bother to ask any more, I just bid. If it is paypal only then ebay blocks my bid and the seller never knows that a higher bid was blocked.

This is on the extremely rare times I can find anything to bid on. I can hope that ebay will collapse sooner rather than later.
JC
Does eBay Effectively Fight Shill Bidding?   Does eBay Effectively Fight Shill Bidding?
by: LastGirl
       
Wed Jul 7 15:27:05 2010
Before I joined ebay, I had heard on the news about the art shill bidding ring in the link below:

http://partners.nytimes.com/library/tech/00/06/biztech/article
s/07ebay-fraud.html

Take notice of this from the article: “Last week, after using its proprietary ''shill hunter'' software to review bidding by several additional Internet names  at the request of The Times , eBay warned two more users.” They only searched for shill bidding because the Times requested it. If they Times hadn’t, the shilling would have continued.

I guess the lawsuit mentioned in the blog is what got ebay’s live auctions shut down. Ebay’s dirty little secret was being made public and they decided it was time to high tail it out of live auctions.

As for the current shilling on ebay, I believe they have helped the shillers when they hid bidders’ ids. Us long timers used to frequently check a persons’ bidding history and see what they had bid on in the last 30 days and report suspicions of shill bidding and all invalid retractions (which can be a sign of shill bidding). During that time, shill bidding happened but not as frequently as it seems to be happening now and retraction numbers rarely went above 5. Now invalid retractions are in the double and triple digits and shill bidding seems to be on the rise with sellers listing private auctions and ebay’s moving the indication that a list is private to the bottom of the screen makes it easier to bid on a private auction unawares.

When ebay started hiding bidder’s ids, they claimed they would detect shill bidding and retractions. Of course that is one of the many lies ebay has told.
Lisa said: “i never understood why ebay made bidder ID private.”

They did it because there was wide spread fraudulent second chance offers. A scammer would see that a bidder (usually a newbie) didn’t win an auction and then send them a fake second chance offer pretending to be the seller. Of course the entire transaction would only take place through emails with Western Union payments. When the bidder didn’t get the item, they would complain to ebay. So now ebay made bidding ids anonymous which drastically reduced fake second chance offers but made it easier to shill bid.
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