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. ®

Similar topics

Broader topics


Other stories you might like

  • Cheers ransomware hits VMware ESXi systems
    Now we can say extortionware has jumped the shark

    Another ransomware strain is targeting VMware ESXi servers, which have been the focus of extortionists and other miscreants in recent months.

    ESXi, a bare-metal hypervisor used by a broad range of organizations throughout the world, has become the target of such ransomware families as LockBit, Hive, and RansomEXX. The ubiquitous use of the technology, and the size of some companies that use it has made it an efficient way for crooks to infect large numbers of virtualized systems and connected devices and equipment, according to researchers with Trend Micro.

    "ESXi is widely used in enterprise settings for server virtualization," Trend Micro noted in a write-up this week. "It is therefore a popular target for ransomware attacks … Compromising ESXi servers has been a scheme used by some notorious cybercriminal groups because it is a means to swiftly spread the ransomware to many devices."

    Continue reading
  • Twitter founder Dorsey beats hasty retweet from the board
    As shareholders sue the social network amid Elon Musk's takeover scramble

    Twitter has officially entered the post-Dorsey age: its founder and two-time CEO's board term expired Wednesday, marking the first time the social media company hasn't had him around in some capacity.

    Jack Dorsey announced his resignation as Twitter chief exec in November 2021, and passed the baton to Parag Agrawal while remaining on the board. Now that board term has ended, and Dorsey has stepped down as expected. Agrawal has taken Dorsey's board seat; Salesforce co-CEO Bret Taylor has assumed the role of Twitter's board chair. 

    In his resignation announcement, Dorsey – who co-founded and is CEO of Block (formerly Square) – said having founders leading the companies they created can be severely limiting for an organization and can serve as a single point of failure. "I believe it's critical a company can stand on its own, free of its founder's influence or direction," Dorsey said. He didn't respond to a request for further comment today. 

    Continue reading
  • Snowflake stock drops as some top customers cut usage
    You might say its valuation is melting away

    IPO darling Snowflake's share price took a beating in an already bearish market for tech stocks after filing weaker than expected financial guidance amid a slowdown in orders from some of its largest customers.

    For its first quarter of fiscal 2023, ended April 30, Snowflake's revenue grew 85 percent year-on-year to $422.4 million. The company made an operating loss of $188.8 million, albeit down from $205.6 million a year ago.

    Although surpassing revenue expectations, the cloud-based data warehousing business saw its valuation tumble 16 percent in extended trading on Wednesday. Its stock price dived from $133 apiece to $117 in after-hours trading, and today is cruising back at $127. That stumble arrived amid a general tech stock sell-off some observers said was overdue.

    Continue reading
  • Amazon investors nuke proposed ethics overhaul and say yes to $212m CEO pay
    Workplace safety, labor organizing, sustainability and, um, wage 'fairness' all struck down in vote

    Amazon CEO Andy Jassy's first shareholder meeting was a rousing success for Amazon leadership and Jassy's bank account. But for activist investors intent on making Amazon more open and transparent, it was nothing short of a disaster.

    While actual voting results haven't been released yet, Amazon general counsel David Zapolsky told Reuters that stock owners voted down fifteen shareholder resolutions addressing topics including workplace safety, labor organizing, sustainability, and pay fairness. Amazon's board recommended voting no on all of the proposals.

    Jassy and the board scored additional victories in the form of shareholder approval for board appointments, executive compensation and a 20-for-1 stock split. Jassy's executive compensation package, which is tied to Amazon stock price and mostly delivered as stock awards over a multi-year period, was $212 million in 2021. 

    Continue reading
  • Confirmed: Broadcom, VMware agree to $61b merger
    Unless anyone out there can make a better offer. Oh, Elon?

    Broadcom has confirmed it intends to acquire VMware in a deal that looks set to be worth $61 billion, if it goes ahead: the agreement provides for a “go-shop” provision under which the virtualization giant may solicit alternative offers.

    Rumors of the proposed merger emerged earlier this week, amid much speculation, but neither of the companies was prepared to comment on the deal before today, when it was disclosed that the boards of directors of both organizations have unanimously approved the agreement.

    Michael Dell and Silver Lake investors, which own just over half of the outstanding shares in VMware between both, have apparently signed support agreements to vote in favor of the transaction, so long as the VMware board continues to recommend the proposed transaction with chip designer Broadcom.

    Continue reading

Biting the hand that feeds IT © 1998–2022