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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
...with a little more substance than the Reuters.com blurb can be found here.
"Give me taste, give me funk, give me fury, gimme some more."
Just read the article, the last line of it summarises the entire lawsuit:
EBay had net revenue of $3.27 billion in 2004.
In the bad form of replying to my own post I found the help section on eBay that explains this policy. To quote:
I want peace on earth and goodwill toward man.
We are the United States Government! We don't do that sort of thing.
So, eBay is price gouging an -auction- whose parameters [set increments] are defined well before the customer participates?
Perhaps I'm missing some nuance of law, but this seems like something that eBay's lawyers [and the judge] will toss into the street with a nice lengthy brief which summarizes to "RTFM!".
Something bothers me about the nature of civil suits and monetary awards in this country.
Why is it that we make it a habit of running off with as much money as we possibly can from a lawsuit?
The purpose of suing for this sort of stuff should be twofold: 1) to regulate company action by means of threat and penalty AND 2) reparations. Nowhere in those two clauses do I find any justification for "screwing the other guy over because he did it to me first."
It seems to me that few suits are about that anymore. While its true that you are entitled to sue if a company takes advantage of you, often times the rabidity with which "wronged" plaintiffs style their demands leads me to wonder if they are simply taking advantage of the momentary shift in power.
In that scenario, it's no longer about punishing the one who took advantage of you because he could. It's about turning around and taking full advantage of him, because now you can.
I liken this to a physical auction where the auctioneer is saying, "I have $100, do I hear $150, $150?" He's looking for $150, not for some dimwit to yell $110. If he gets no bites at $100, he may sell at $100 or ask for $125. What he doesn't do is throw it open for said dimewit to say, "I'll give you $100.01."
"I'd rather be a lightning rod than a seismometer." -Ken Kesey
Nobody seems to understand the problem here. It isn't about winning auctions. It's about eBay automatically increasing your bid for no real reason.
Here's the scenario:
You bid on an item for, say, $80.
Somebody comes along, bids $75.
Your bid is auto-incremented to $76 to beat out this other bidder.
You, getting nervous that somebody might usurp your spot with a max bid of $80, increase your maximum.
When you increase your maximum bid, eBay automatically increments the CURRENT bid value by the increment amount, EVEN THOUGH YOU WERE THE CURRENT HIGH BIDDER TO BEGIN WITH.
This is where the price gouging comes in. You are already the high bidder, you're just increasing your maximum bid. It shouldn't increase the current bid when the current high bidder increases his maximum, though. That is totally nonintuitive. The system interprets your maximum bid increase as a "competing bid" however and checks its max value against the current max bid value, and if greater, it "bids" on the item with the new max value, increasing the cost by the minimum increment, just as if ANOTHER bidder had come along and bid on the item at a higher value.
It's like you're bidding against yourself whenever you increase your maximum bid, and THIS is the price gouge that is to be disliked.
Reinvent the wheel only at either a lower cost, greater effectiveness, or your own personal enrichment and satisfaction.
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.
Once again the little-guy gets the short end of the stick
Maybe the 'little guy' needs to be a little more careful with the pointy end of the stick, if he doesn't want the big guys to come and take the stick away.
This is a perfect example of a frivolous lawsuit. Some functional illiterate from the Land of Fruits and Nuts logged onto eBay and placed a couple of bids without having his mommy read him the eBay terms of service first. It's amazing (and frightening) how few eBay users actually understand how eBay auctions work.
Dahlmann tightly grips the knife, which he may have no idea how to use, and steps out into the plain.
One thing I can say is good, though, is that eBay doesn't nail bidders for a fee as well. I've had to shell some $$ in the past on other auctions and thought that was pretty scurvy, but it actually is practice at many large auction houses. Sothebys and the like didn't become famous for their charity to buyers and sellers.
Yeah, but acccording to themselves (IIRC) EBay are not auctioneers:-
From Ebay.com and also at Ebay.co.uk, they say that:-
3. eBay is Only a Venue.
3.1 eBay is not an auctioneer. Although we are commonly referred to as an online auction web site it is important to realise that we are not a traditional auctioneer. Instead, the Site acts as a venue which allows registered users to offer, sell, and buy just about anything which is legal, at any time, from anywhere, in a variety of price formats. We do not review listings provided by users, we never possess the items offered through the Site and we are not involved in transactions between buyers and sellers.
In short, they do a lot less than Sothebys and friends, so I don't consider this largesse in any way.
"Slashdot - News and Chat Sites Deviant". (Click "homepage" link above for details).
"therefore his bid increment would not be enough to secure the item"
That is not correct if I understand you right, so your comment should not be moderated Insightful.
The proxy bidding system is what eBay is using to manipulate some buyers, and thus milk higher FVFees from eBay sellers.
A person CAN win an auction if their high bid is not a full official increment above the lower bidder. This happens in the following situation:
I bid $5.02 on an auction first. Then you bid $5 in the final seconds, in an attempt to snipe my bid which is showing as the starting price of $0.99. I win the auction with a winning bid of $5.02, even though the next increment should be $5.25.
My appology if you meant this and I wasn't understanding what you were saying in your post.
Why slashdot? Why not?
I've been with Paypal since near its beginning and I've always been surprised that its made it since its margins are actually very low. So yeah, Paypal isn't doing that much gouging, at least on this issue... (it has other problems...)
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'm sorry, you're oversimplifying. When you specify a new maximum bid of $125, you are agreeing to pay that much if that's what's required to win the auction. In this case, it's not. $100.01 is what's required to win the auction, and that's what you've already bid.
The reason that this is a dubious lawsuit is that the behavior is already described by eBay's documentation. That doesn't mean it's the right way to do things.
Why shouldn't eBay force people to bid when they raise their maximum? For the same reason that they shouldn't force people to always pay their "maximum bid" amount. There may be reasons why this lawsuit is BS, but yours isn't one of them.
There are no trails. There are no trees out here.
Not only is this summary 1/4 as long as the article summary published by Slashdot, it displays a superior level of understanding by its author. More importantly, it encourages readers to read the entire article, rather than pissing them off with typos or stupid statements like this
and this
This is a case where, if I were a schoolteacher and "symbiot" was my student, I would encourage plagiarism.
Before eBay, there was a contingent of lonely, fat housewives and weirdos that collected tons of goofy, worthless crap that nobody cared or knew about. After eBay, this contingent of social malcontents has found a place on the net where they can let their obsessive pathology run wild. If you don't believe me, look at eBay's forums and see all the ADD/bipolar people complaining their their treasure hunt game is rigged. If you think Slashdotters are antisocial nerds, you have no idea... eBay locals make AOL people look like the M.I.T. graduation class.
Remember folks, this is the site that gave us the virgin mary grilled cheese sandwich. Of course it's populated by a bunch of loonies who are desperately looking to get their 15 minutes of fame and move out of their trailers. Why is Slashdot giving these people any publicity? Every other day someone is threatening a class action against eBay because they got negative feedback over the 18-century electric can opener they sold being claimed as bogus.