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eBay Accused of Price Gouging Scheme
Symbiot writes "eBay is being sued in a Calilfornia court for a practice that the plaintiff, Glenn Block of Pennsylvania, claims artificially raises the amount of a bid. The practice combines the warning emails that eBay sends out when you are the highest bidder and your bid is at your maximum, with the bid increment mechanism. It seems that if your original maximum bid settnig prevents your current bid from falling on an increment then your current bid will be raised to the next increment as soon as you raise your maximum. If the plaintiff wins this class action suit could cost eBay tens or hundreds of millions of dollars."
Bullshit. This happened to me once.
I had a max of say 100.01 and another bidder had bid 100.00 while the current high was substantially lower, so it showed 'You have been outbid the current high bid is 100.01' Now, they could bid at least 102.51 and take the lead or had figured that was just too much, either way, I see that they have homed in and I raise my cap to 125.00, suddenly my high bid is 102.50 rather than 100.01.
To shed a different light on this, there was another time a similar thing happened, but when I reloaded the page later it would revert back to my prior high bid, which can be handy for disguising what your actual new cap is. I'm sure they know all about it and had fiddled with the way it works.
It happened once to my knowledge, so I'm probably only entitled to a couple bucks, but it will be interesting to see how this plays out.
If the plaintiff wins this class action suit could cost eBay tens or hundreds of millions of dollars."
I think that's a gross exaggeration of the problem, however it could cost eBay a lot in man-hours auditting the results of every auction since the beginning to determine who is entitled to a refund.
A feeling of having made the same mistake before: Deja Foobar
I've actually managed to outbid myself several times. It's very annoying.
... that makes me wonder if Dubya's plan to take class-action suits out of the state courts is actually a good one.
Anything that makes the legal system look less like a lottery is sounding pretty good right now.
Dahlmann tightly grips the knife, which he may have no idea how to use, and steps out into the plain.
"Or something. I've never tried other auction places"
Don't bother. I collect old watches and one day I saw a watch I wanted. At $50, no reserve. I emailed the guy to see if he'd take $250 (about a quarter of what it's worth, hey, it's worked in the past) and he said he'd just sold it for $200 and can't understand why it didn't sell in a month on Yahoo auctions with a buy it now price of $100.
ebay has no competition. That's bad in a way, but it's also good in that you only have to look in one place.
I don't sell on ebay, only buy and its saved me tons of money. Actually it's cost me tons of money, but I got way more for the money than I'd get paying retail.
In fact, I just noticed I don't really buy much on stores at all any more.
Need Mercedes parts ?
Yeah I've noticed that. Another thing I have noticed when "shopping" around there. There will be an item with say a 7 day auction and it's on day 4 and there were 6 bidders. I see a number of instances where some are all of them bidders have been signed up as a buyer for 2+ years and bought nothing in all that time. But all of a sudden they decide they want the item I want. Hmmmmm.
My karma is not a Chameleon.
Yep. Not only to get it listed which arguably is not that much and stops certain mechanisms (e.g. spammers, last minute pull-outs). You also have to pay a % of the price for which you are selling the article. IIRC this was recently raised.
My major problem with eBay is that there is no major competitor to eBay. Especially no international one. Let alone competitor to Paypal. No major competitor means they have all the freedom to raise prices, with no decline of customers (aka monopoly). Because, a website where almost nobody puts products on and/or where almost nobody sees what you have to sell or bids just doesn't work! Paypal competition suffers from the same problem!
They have no major competitor i'm aware off. There is only 1 local one which is just starting up here locally (speurders.nl) the other got bought for ridiculous amount of money (marketplaats.nl). None of which are international and the latter is not an actual auction site.
Basically, for 2+nd hand hardware which is what i'm hunting for, eBay.de is my only option. I can use eBay to see the text in English. Its (roughly) pretty cheap -- but unfortunately i support a huge multinational and IMO monopoly by buying over there. Sad, really.
WE DON'T NEED NO BLOG CONTROL.
"So, eBay is price gouging an -auction- whose parameters [set increments] are defined well before the customer participates?"
If it's written in the rules that incrementing your limit also increments your bid, I don't see how this has merit as a legal case for damages. Just one more reason to decide what you will pay for an item, bid that amount, and be done with it win or lose.
I have never really gotten any benefit from the last minute bidding war. Someone who does that against me was willing to pay more than me in the first place. I'm not going to get emotional or get an adrenaline rush and suddenly decide it's worth more than my original bid.
But, I'm a big fan of buy-it-now and I really like to use merchants who do their stores on ebay.
-fb Everything not expressly forbidden is now mandatory.
When PayPal first started they claimed to make their profit from the interest while your money sits in their accounts. When you send someone money, they take it right away. When you want to cash out, they write a check and it takes a few days or a week. Better yet for them, you maintain a positive balance. All the while they are earning interest on that money. It may not seem like much, but when you have millions and millions of users, many with hundreds of dollars on their balance.
Somehow PayPal manageges not to be classified as a bank either, which has been a hot topic in the past. They get to skirt much of the federal regulations.
I don't know if this is still their business model, but if so, i think it's great. Customers get a cool service and they make money as a byproduct of the service. It's a win-win situation when it works.
TODO: come up with a clever sig
I think that's going a bit far. Have you never tried to buy an item where lots of people are selling the same thing? Sure, I might be prepared to pay up to £100 for one, but if someone lists an identical one the next day, I'd rather have the option of trying a £50 bid on the first, and then bidding on the cheaper one if I get outbid. There's nothing worse than having your bid automatically incrementing whilst you are watching someone else get the same thing much cheaper.
Of course, auction sniping is the real way to go. Prevents all those fickle people upping their bids maximums.
Homme petit d'homme petit, s'attend, n'avale
That postitive value is called the "float". Lots of businesses earn a little extra on somebody else's float, especially big businesses. A good accounts payable department helps with this--make sure you don't pay your bills until the last possible moment, so the amount of interest you can earn between recieving a service and paying for it is maximized. Better yet, if you can get away with paying late, do so. Lots of larger businesses are like this. Oddly enough, anecdotally Walmart is one of the few large large businesses that always pays on time. Never early, but always on time.
People think that they are "sticking it to the evil corporations" with all their frivolous lawsuits.
They sue big "evil" company for millions of dollars.
Big "evil" company considers this a cost of doing buisness, and passes the cost down in the price of the goods they sell.
We, the people, then pay for it in higher cost of goods and services.
Perhaps you don't buy from Ebay, but no part of the economy is exempt from the lawyer tax.
Or it least, it was, the last time I used it years ago. The trouble is it's so easy to abuse.
You know the exact time the auction will end. You can price snipe at the last minute.
You can determine the high bidders maximum bid. Most people will bid an even amount, say, $100. Bid $96, see the current at $100, and you know you can bid $105 at the last moment. See above.
Surprised as I am to find myself saying this, the largest auction house on the internet could stand to learn a thing or two from a game feature. WoW's auction house avoids both these issues. You don't know when an auction will end, only a range, and bids delay the end of the auction by a small amount. And there is no proxy bidding, so you don't know how high someone might be willing to go.
I've raised my bid before. Do it quite often. I set aside say $20 a month for wasting on other people's used junk, so I bid $5 on a couple of things that look interesting. Then I lose one and raise the other to $10.
I understand the premise of the auction system quite well, thank you very much. But, the maximum I'm willing to bid changes over time thanks to that budget.
It's still a value for used items. It's a great place to save money if you don't mind getting something used, or to make it if you have something you no longer need. For example I got a Hafler P1500 off there for like $150. A quick search on the net shows that $350 is about the minimum you can get one new for. Well I don't need a new one, it's a solid state amplifier, it's highly unlikely to break if properly cared for. So I picked one up used. I was happy, I saved $200, the seller was happy, he got $150 for something he didn't need.
You are right that new goods generally aren't that good a value. That only generally happens in the event of overstock. Some companies eBay overstock becuase it's cheap and easy. However buying used gear is often the way to go. No, you don't want to do that for low-end consumer gear, that stuff breaks quick. However a deceant idea is to just spend a bit more on some used pro gear.
For example, if you want a VCR, you are looking at like $20-50 for a cheapie, and probably $100 for a "good" one. Not likely to be all that high quality, and not likely to last. Or, you could cruise to eBay and find a used pro unit. There's a JVC pro editing SVHS VCR going for like $100 right now. Thing is 6-years old, but guess what? They are built to last, it'll still probably work in 15 years if you take care of it and it will look a shitload better than a cheapie consumer deck.
How about this one...
I place a $50 bid on a item currently at $40, and of course become the highest bidder at $40.50. A few hours later, eBay tells me I've been outbidded, but then a few minutes later sends meanother email to tell me the latest bid has been withdrawn, and I am again the highest bidder... at precisely $50! if that doesn't smell of shill bidding...
Anyway, I was prepared and willing to pay fifty bucks, but hey! anyone likes a discount!
Xavier
Do I make sense? Please report if not.
This is not "price gouging". This is nothing evil on eBay's part. So what if they get an extra cent from whatever small fraction of auctions in which this occurs? They didn't do this for the money, they did it because it was easier and not significantly better than any other way.
There's a lot of discussion here about whether or not increasing your maximum ought to constitute a new bid. eBay decided when they implemented the bidding system that it would. It was strictly an implementation question Odds are the people on the business end never comprehended such a distinction could exist.
Think about the bidding system. Each auction has a list of bids associated with it. If eBay is implemented with a relational database backend, they have a (very very large) table of bids. The table has columns for all the necessary info about a bid (auction it's connected to, user who made the bid, maximum value, time it was bid). When somebody bids, a new row is created in the table of bids. The question is what happens in the abstract case of "raising one's maximum". Let's look at this more practically.
"Raising one's maximum" is defined as entering a bid in an auction where one is already the maximum bidder. Simply determining if this is the case requires answering a few questions:
- Who is the winning user, and how large is their bid?
- Is the user making this bid that user? (I.e., is the current user already the winner).
- Is the new bid's maximum greater than the previous maximum (the previous winning bid)
Depending on how eBay is implemented, this may result in another database query. It probably won't, but it's certainly additional CPU time and complexity. The engineers may have decided not to write this special case, to save a little bit of computation. (And when you have as many bids per second as eBay does, it definitely helps.)In the absence of the special case as above, a new bid by the winning bidder is treated precisely the same as a new bid by a non-winning bidder -- i.e., it can be no lower than the next increment above the current price.
IANAL, and I don't know what legally constitutes "price gouging" or whatever the exact charges in the suit are... but this certainly doesn't seem to have any merit.
In conclusion, this was not an evil move on eBay's part. They're not trying to make a buck off anybody (they're already succeeding beyond anybody's wildest, most avaricious dreams at doing exactly that). This behavior is logical, documented, and most likely the product of an implementation decision. Case has no merit... wouldn't it be nice if for once the judge saw it that way too?
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