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Wednesday, February 23, 2005

Lerach Coughlin Law Firm Files Suit Against eBay

The Lerach Coughlin Stoia Geller Rudman & Robbins law firm (how's that for a name? bahahaha) filed a class action lawsuit against eBay today in the California Superior Court in Santa Clara. They think eBay is using "hidden shill bidding" against it's own customers to drive up the auction prices.

Why do they think this? Well, it's because eBay sends out the following notice to bidders that are close to being outbid: "Important: You are one bid away from being outbid.  If another user places a bid, you will not win.  To increase your chances of winning, enter your highest maximum bid."

That message is to let them know that if they don't raise their maximum bid, and another bid comes in, the eBay system cannot bid any higher on that item on their behalf.

This is what eBay had to say about it... "Shill bidding is the act of artificially inflating the price of an item by a bidder working in concert with the seller placing bids that they have no intention of actually paying," he said. "Shill bidding is not allowed on eBay, and we take action against anybody who we determine has engaged in shill bidding. A bidder who has been outbid by another bidder and chooses to increase their maximum bid is not shill bidding."

It's things like this, that makes me realize that law school most certainly does not teach anything about technology (and reminds me a bit of the Winn and Sims law firm).


PhilipCohen said...

Shill Bidding on eBay: A Case Study

For anyone that is interested, a detailed case study of a blatant shill bidder on eBay, and a comment on eBay’s apparent attitude thereto, at

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