Shill Bidding

[Ken Dean]

How would(or could)title 18 of the United States Code section 1343 define shill bidding? If a person consigns an item to an online auction service and then bids on that item with the auctioneers knowledge, under the before mentioned title, would that be considered shill bidding? Thanks in advance!

 

[HomeGuru]

What is the reason that the owner of the item is bidding?

 

[TimC]

With my experience with Ebay auctions only, it is my understanding that it is legal for the seller of an item to place ONE bid on his own item during the course of the auction. This is allegedly to make up for the possibility of forgeting to place a reserve price, etc.

Keep in mind that if such a bid were to occur, it should only happen with the seller's user ID, and not some fake ID, or that of a family member or friend. That way it is clear to all participants of the auction what is going on.

This may very well be in the "rules" of ebay auctions, however I consider it to be dishonest, and will not place a bid on an item where I suspect the seller of bidding against me.

E-Bay rules MAY have changed on this policy, however.

This is yet another case where what is "legal" is not necessarilly what it "right".

 

[Ken Dean]

This was not an ebay auction, it was a "real-time" no reserve auction held in a chat room. The owner consigned the item to a person in Connecticut (the auctioneer) then bid on the item because he felt and I quote "the item was not reaching the market price." The auctioneer clamis that he cannot bar the consignor from bidding on their own item.

 

[TimC]

Not reaching the market price?

An auction is the ultimate vehicle for determining what the market price is! If you have any number of people bidding on an item, then that, in essence, is what DETERMINES the market price!

If the guy wanted whatever he determined to be "market price" then he should have just put it up for sale and not wasted the auction expense and hassle. The man is a dolt.

I wish I could be more helpful in terms of the legality of the situation, but the laws are most assuredly different in various states. Where there any "rules" to this auction before it began. or was it just an informal proceeding? Was it obvious that the owner was bidding on his own item? If it were obvious, then I would think that it was immediately possible for the current bidders to stop bidding.

Regardless of the legalities, it does not sound like someone I would like to do business with either way.

 

[Ken Dean]

Only the auctioneer and the consignor knew the item was being bid on by the owner. Imagine that! The "rules" are, there are no rules. This auction house runs 2 to 4 auctions per week with as many as 60 lots per auction.

The reason for asking was simple: Ebay NOW calls this shill bidding. They reference title 18 USCS 1343 as being the federal law/s governing this type of deception. I was hoping someone could point me in the right direction for researching. Again... Thanks!

 

[HomeGuru]

The writers question is yes and it is wrong and fraudulent. Ebay had problems in the past whereby there were strawbuyers or front people in a network and they were throwing in bids to help each other inflate the bid prices. Of course these so called bidders never had any intention of actually buying the items. They were merely playing the game acting as real bidders under different aliases. Some of these people were attorneys.

Do a search on some major search engines on this subject. There were articles also that appeared in major print media. I believe I also read some info on the Ebay website either on the site somewhere or in the disclaimer or use section.