Net sleuth calls eBay on carpet over shill bidding
Thrashed with a feather
How can you be sure the price of your latest eBay buy wasn't shamelessly inflated by some faceless shill bidder? Well, there's always the ad hoc investigative skills of Australian retiree Philip Cohen.
Cohen recently posted a nearly 8,000-word shill-bidding case study to the online forums at AuctionBytes, as part of a, shall we say, dogged effort to show that eBay does relatively little to stop the underhanded practice. His case study tracks an Aussie eBayer who made 190 bids on 41 items over a 30-day period, and all 41 items were listed by the same seller.
The implication is that the seller and bidder are the same person - or that they're working in tandem to boost prices on the seller's auctions. Cohen estimates that on one auction, the bidder in question artificially raised the price of the item by $156.
"This underbidder...stopped his 'nibble' bidding at the point when he equaled the maximum proxy bid value of the ultimate buyer," Cohen writes. "At that point the underbidder would also have understood that only one more incremental bid was required for him to win the item; but he did not make that one more bid. What then is the chance that this underbidder is not a most naïve and blatant shill bidder? Absolutely none!"
And eBay agrees with him. When we brought Cohen's case study to the company's attention, it acknowledged this was a clear case of shill bidding. What's unclear is how readily eBay can detect this sort of thing - and whether the company is doing all it can do to discourage it.
According to eBay, it has tools in place that automatically detect shills. "We have a lot of back-end algorithms that look for account linking," says Brian Burke, a senior director on eBay's trust and safety team. "It's pretty high risk for an [established] seller to shill bid because it's one strike and your out. As you can imagine, it's not something we tolerate."
But the company won't say how these tools work. "Generally, we don't disclose the specifics on the algorithms because it shows someone how to circumvent the system. What I can say is that we are constantly updating and evaluating the algorithms as we get new information. You can imagine the stuff we were using eight years ago to identify shill bidding is very different that what we're using today."
And it seems that despite Burke's words, eBay does tolerate shilling bidding - even from established sellers.
When we spoke to Burke on the phone, he hadn't read Cohen's case study. But after he and other eBay staff were emailed the link, a company spokesman said the seller in question "was flagged by more than one of our filters and was reported on by other members." According to the company, it took action against the seller the day after the completion of the primary auction highlighted by Cohen. But it didn't ban the seller. It didn't notify the defrauded buyer. And it didn't alert the community at large.
The spokesman told us the company "warned the seller that what they were doing was a violation of eBay policy" and "removed all of the seller’s active listings."
But a quick perusal of the seller's feedback page indicates this may not have been the case. The auction profiled by Cohen closed on March 29. It has been removed along with many others likely dating back to the same period. But feedback left by buyers shows that well after March 29, these auctions had not been removed. Some feedback was left as late as May 11
In fact, the buyer defrauded in the auction tracked by Cohen left feedback on April 3 - meaning the item wasn't removed until after that date.
What's more, you have to wonder which eBay members alerted the company to the shill. Until the end of June, neither Cohen nor the buyer victimized by the bidding covered in Cohen's case study contacted the company. In fact, the victim was unaware he'd been shilled until Cohen contacted him.
Cohen eventually reported the two auctions on June 27, a few days before the 90-day data listing retention period expired.
eBay also said it restricted the seller to fixed-price listings for a period of 14 days and required the seller to take a tutorial on shill bidding. But according to the company, that was the extent of the punishment. "In many cases, sellers – particularly new sellers – are not aware that what they are doing is against our policy," the eBay spokesman told us. This seems to contradict what eBay's Brian Burke told us earlier. The seller in question has been an eBay member since 2003.
We've contacted this seller in an effort to clarify the matter - and at least get a little closer to the reality of eBay's efforts to stop shill bidding. But he's yet to respond. And we don't expect he will.
What we can say is that he's still selling.
"When you consider that...shill bidding activity is a crime, you would have to say that eBay's response is pathetic - I think I have used the term 'thrashed with a feather' - and hardly a deterrent for those inclined to such activity," eBay crusader Philip Cohen tells The Reg. "The only conclusion one can make is that eBay does not really care about shill bidding, as it does not detrimentally affect their bottom line."
In fact, it may do just the opposite. ®
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