This is getting out of hand. Is this lawsuit week here in California or what? But now on the heels of Dell and HP, comes a new lawsuit aimed at auction giant eBay.
"EBay Inc. is being sued by a Pennsylvania man who charges that it illegally forces up prices when certain high bidders raise their maximum bid to guard against last-minute offers, an attorney for the plaintiffs said on Wednesday.
"In a proposed class-action lawsuit filed Feb. 17 in Santa Clara County Superior Court, lead plaintiff Glenn Block claims that eBay raised his bid from $111 to $112.50 after he responded to an e-mail from auction site that said he was the highest bidder for an item.
"The email warned that he could be outbid if he did not increase his maximum. Block alleged that he could have won the auction at $111, and accused eBay of forcing him to overpay by $1.50." Source: Reuters via Yahoo News
Maybe I'm missing something but I thought that's how it works. If you are the highest bidder you can sit and wait praying that no one else swoops in, or you can re-set your maximum to ward off a last minute bid.
Is that wrong? Any eBay bidding experts out there who want to weigh in?
UPdate From InternetNews.com: "Bids on eBay must be raised by minimum increments; for example, if someone wants to top a bid of $100, he must bid at least $102.50. Bidders can wait and watch to see if anyone else places a higher bid, or they can set a maximum bid amount and let eBay's system automatically bid for them. According to eBay, the system will only bid enough to maintain the bidder's top rank, that is, one minimum increment above the second-highest bid.
"When bidders reach their maximum bids, they get an automated e-mail confirmation that they're the highest bidder. But it includes the warning, "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." The bidder would assume that his bid would only be raised again if someone outbid him. However, in some cases, the system automatically increases the bidder's already high bid by enough to meet the minimum increment.
"Said Kathrein, "Essentially, they're saying, 'even though we don't tell you this, when you place that next highest bid, we'll put it a full increment above the bid behind you.'" For example, if that person with the $100 bid accepted the invitation to raise his maximum, the system in some cases would immediately raise the bid to $102.50 -- even if no one else had bid in the meantime.
"If a user accepts eBay's request to provide a higher maximum bid, eBay then acts as a shill bidder on behalf of the seller at the price level of the highest former competing bidder. As a result of eBay's hidden shill bid, eBay automatically raises the hapless buyer's bid so as to out-bid eBay's shill," the suit charges.
"David Reiley, associate professor of economics at the University of Arizona, and an expert on eBay bidding, said, "What eBay is doing is a little bit glitchy, not it's real cheating. It could fix this problem by requiring people to submit bids on a fixed grid." Source: Internetnews.com
To be honest, I am still confused.... # Permalink
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Trial lawyers must be getting desperate if they're suing for $1.50 now...
The problem is in the bid increment. If your max bid is $20 and a person bids $19.50, your maximum bid needs to be above that amount by the bid increment of the auction for you to continue to be in the auction. So even though $19.51 would win the auction given that bid, if the bid increment is $0.50, your automatic bid will go to $20, your maximum in this case. If your max bid was $22, it would still only go to the amount represented by the challenge bid plus the bid increment.
Ah Ha. So it is the increment that is the issue. Thank you for explaining that. But doesn't some for of bid increment exist even when yo uare not the high bidder?
That has bugged me the couple of times I have run into it. It should be a simple thing to compare who has the top bid with who you are and not kick the price but how many millions of processes would it add to the servers?
Let's look at what happened: "Glenn Block claims that eBay raised his bid from $111 to $112.50 after he responded to an e-mail from auction site . . ."
Let's say that the current price on the item was at $80.00 by person "X". We do not know what maximum bid "X" had entered. Glenn Block submitted a bid of $111.00 and became the top bidder by submitting a bid higher than "X"'s maximum bid of $110.00. If he had submitted a bid of $112.50 or more, the auction would only show that Glenn was high bidder at a bid of $112.50.
I assume that Glenn 'responded' to the e-mail by increasing his bid, which would have caused him to bid an amount covering the remaining bid increment for that level. If he had not 'responded' and no one else bid either, then Glen would have won the item at $111.00.
Until sometime last year, Ebay did not show the bid amounts until after the auction had ended, so person "Y" could not see what person "X"'s bid was. Now that you can see this, buy looking at the bid increment table, "Y" can deduce that Glenn's maximum bid was $111.00 can can safely outbid him with a bid of $113.50 or more. Previously, this could not be deduced.
The mechanics of this have been posted in Ebay's FAQ at http://pages.ebay.com/help/buy/bid-increments.html for years. So for $1.50, Glenn was able to hide his new maximum bid amount to everyone else who might have bid if they knew they could outbid him with a bid of $113.50.
I had a problem with ebay, I bid on an item with a max bid some one else bid on it forcing up my bid, then that person became the high bidder, and then said that they did not make those bids, ebay didnot reduce my bid to the price before the other person started but to the max amount I specified.
The increment is the problem. The other explainations where too complex for me to follow. Here is how it happened to me. I bid 8 dollars with a max of 10, the increment is 50 cents. Another bidder bids or max bids to 9.99. My max gets it at 10, here is the problem, without the increment built in. Now I could get it at 10 but I foolishly fall for the "you might not win without increasing your max bid" rouse. Your bid automatically goes to 10.49, you could have had it for 10 without the rouse. EBay should either inforce the increment inside max bidding, by not letting you win bid if your are not a full increment above or not allow you to bid against yourself. NOT ignore the increment, then enforce the increment. Nobody wants to bid against themselves, it is more than just an aggravation. A few pennies here and there finally adds up to some real money on the millions of auctions. I would like to see the math, and of course it profits sellers too.
This is getting out of hand. Is this