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 user 2005-02-24 at 9:40:00 am Views: 65
  • #10501

    EBay Sued in California Over Bidding

    FRANCISCO  – 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

    In a proposed
    class-action lawsuit filed 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 the 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.

    “Based on what we know about
    what’s being alleged, it appears the plaintiff completely misunderstands the
    functionality of the eBay bidding system,” eBay spokesman Hani Durzy said. He
    said the company had not yet seen the lawsuit.

    Durzy told Reuters that eBay only
    notifies winning bidders that they could be outbid when they have hit their
    preset maximum bid. Increasing a maximum bid is voluntary.

    EBay only increases bids when
    bidders have raised their maximums and when the prior top bid was between
    bidding increments. For example, bidding increments on items priced between $100
    and $249.99 is $2.50. Durzy says eBay discloses such information on its Web

    Plaintiffs’ attorney Reed
    Kathrein, of Lerach Coughlin Stoia Geller Rudman & Robbins equated eBay’s
    actions to “shill bidding,” and said it forces bidders to bid against

    Shill bidders are often in
    cahoots with sellers and work to artificially raise the price of auction items
    they have no intention of buying.

    Kathrein said eBay and its PayPal
    online payments unit receive larger transaction fees as a result of the
    company’s alleged shill bidding.

    He said eBay’s actions have
    created substantial unlawful profits for eBay and its online payment unit
    PayPal. He said required restitution would run in “excess of tens of millions,
    if not hundreds of millions, of dollars during the past four years.”

    EBay had net revenue of $3.27
    billion in 2004.