|Sat Dec 22 2012 19:46:54|
eBay Relaxes Shill Bidding Provision in Major Policy Shift
By: Ina Steiner
eBay relaxed a provision of its shill bidding policy - friends, family and acquaintances are now allowed to bid on a seller's auctions in certain circumstances. eBay's new shill-bidding policy states, "Shill bidding happens when anyone - including family, friends, roommates, employees, or online connections - bids on an item with the intent to artificially increase its price or desirability."
The old policy prohibited friends, family and acquaintances from bidding on your auctions at all: "If people you know want to buy your item, they should do so in a way that doesn't involve bidding." That's because, according to eBay, "people the seller knows might have information about the item that other members don't, which might give them an unfair advantage."
This is a major shift in how eBay treats shill bidding, which is a crime in many states. In fact, last year, eBay briefly banned "online friends" from bidding on a seller's auctions, leaving sellers with large followings on sites such as Facebook, Twitter and LinkedIn in a quandary.
Also surprising is the fact that eBay never announced the change in its shill bidding policy. We researched the issue after an EcommerceBytes reader noticed the change on the eBay policy pages. A search on a major search-engine reveals that blogger "cappnonymous" noticed the change in June. He noted that the timing of eBay's policy change seemed to coincide with an incident involving the owner of an eBay drop-off store who participates in a reality TV program.
On the surface, eBay's new policy makes sense - just because someone knows a seller doesn't mean they're in cahoots with that seller to raise the bidding on his or her auctions. But as with everything related to eBay, it's how the policy will be enforced that's the sticking point. Sellers remain just as susceptible to accusations of shill bidding - how will eBay be able to determine the intent of the bidder?
In fact, the new policy makes no mention of how it will determine intent.
Further muddying the issue is the fact that eBay's help pages serve up a contradictory message about shill bidding: "Shill bidding means bidding for an item while holding more information about it than other members could - for example, if you're a family member, roommate, or the seller's employee. We don't allow shill bidding because it can falsely increase an item's price or desirability. Make sure your listing follows our guidelines. If it doesn't, it may be removed, and your buying and selling privileges could be restricted."
Many people are bound to see the policy shift as a negative, since actual shill bidding drives prices up. But others will see it as a positive, assuming eBay enforces it consistently.
The EcommerceBytes reader who informed us of the policy change wrote, "This is a good change for our business, because we have had several instances where we suspended from eBay for 10 days or even 30 days because some competitor would report us, knowing that many of our sucessful bidders KNOW me because I ran a retail store for 10 years, and are from the same city thus violating the rule against friends bidding. Or look at an item at a coin show in person, and thus become "someone with more knowledge than the general public has.""
We asked eBay for comment on Friday, they did not get back to us by press time.