eBay Admits to ‘Shill Bidding’ and eBay Sellers Jacking Up Their Own Bids  
by Anne P. Mitchell, Esq. - 1 Comment, Last updated 07/18/2009

Power buyers on eBay have long known - or at least suspected - that some eBay sellers create fake accounts, with the shill accounts doing “shill bidding”, that is bidding up the price on their own items, artifically inflating the bidding price so that the winning bid (never their own, of course) earns them more money. But now eBay has been forced to admit that shill bidding, by unscrupulous eBay sellers, does indeed occur.

Phillip Cohen has conducted his own study of the issue, and posted his results (see link at bottom) in an online auction forum.

Cohen’s analytical depth and skills (he is a retiree, although we know not what his profession was) have resulted in a report which is arguably quite damning, however it is not the report itself - it being that of just one person - that is the nail in the coffin.

Rather, it is this: in the course of the Register reporting on Cohen’s results, they contacted eBay, and eBay admitted to the shill bidding going on.

According to the register, “eBay agrees with [Cohen]. When we brought Cohen’s case study to the company’s attention, it acknowledged this was a clear case of shill bidding.”

Of course, eBay’s Brian Burke, an eBay Trust and Safety Director, goes on to say, “We have a lot of back-end algorithms that look for account linking. 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.”

Tolerate or not, it’s happening.

You can read Phillip Cohen’s on shill bidding on eBay here.

And you can read the Register’s article on shill bidding here.