Sunday Times Reports Widespread Shill Bidding on eBay

January 29, 2007

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A newspaper report finds many dealers on auction site Ebay artificially driving up bids, forcing consumers to pay more for offered items than they should.

The Sunday Times of London said it undertook an extensive investigation and found so called "shill" bidding is widespread across the popular site.

Among the evidence the newspaper presented to its readers was a transcript of a taped conversation with one of Britain's major eBay dealers, who admitted that he used associates to bid up prices of his offerings.

The investigation also reportedly found businesses placing bids themselves, using false identities.

The Times notes that eBay's policies strictly forbid bidding on your own items, but points out the rule is hard to enforce. A recent rule change designed to protect users' privacy drops an extra curtain around bidders' identities, making it hard to know just exactly who is bidding on what.

The Times quotes Eftis Paraskevaides, an eBay "Titanium PowerSeller" as claiming shill bidding is commonplace on eBay.

Paraskevaides said he would occasionally ask a business associate to place a high bid if he was offering something really expensive, and was concerned it might go too cheaply.

He also claimed to be immune to eBay disciplinary action because he generated so much money for the Web site.

"Are they going to ban somebody who's making them the best part of 15 grand a month?" he asked the Times undercover reporter. "No," he said.

The Times reported Paraskevaides disavowed his comments, after being told he had been talking to a reporter.

A spokesman for eBay told the Times he expects that the company will launch an investigation into Paraskevaides and charges of shill bidding.

Auctionbytes.com reported last year that a German company was offering a shill bidding service to help sellers drive up their prices.

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