View Full Version : Poor, poor Ebay is catching it again...

02-25-2005, 07:54 PM

San Jose-based eBay has overcharged hundreds of thousands of consumers by artificially inflating the price of goods sold on its Web site in order to boost its transaction fees, according to a class-action lawsuit.

The company's actions, ``require restitution in excess of tens of millions, if not hundreds of millions, of dollars during the past four years,'' according to the suit filed in Santa Clara County Superior Court.

EBay spokesman Hani Durzy issued a statement Wednesday saying the company's executives were unable to respond in detail to the accusations because they hadn't seen the lawsuit. ``But from what we have heard, it appears that the plaintiffs misunderstand the functionality of the eBay bidding system,'' his statement said.

The suit, which was filed last week, seeks a court injunction halting eBay from inflating the prices of its auctioned goods and demanding unspecified damages for consumers. The plaintiff is represented by Lerach, Coughlin, Stoia, Geller, Rudman & Robbins, a San Diego firm well-known in Silicon Valley for filing securities fraud cases on behalf of stockholders.

The eBay suit named only one consumer, a man in Pennsylvania who had allegedly been victimized by the inflated prices. It claimed the overcharges typically amounted to only a few dollars per transaction. Nonetheless, the suit said, the amount of the losses could be enormous, considering how many people use the site.

Posting revenue last year of $3.3 billion, eBay is the world's biggest online auction site, with 135 million registered users and millions of items listed for sale each day.

All together, those sales translate into a lot of money for eBay because of the transaction fees it charges sellers. EBay gets $1.31 for an item sold for $25, for example, and proportionately larger fees for products selling for larger amounts.

The lawsuit likened the way eBay handles auctions to a shill bidding scheme, where buyers are duped into paying more than they had intended for goods.

When consumers bid on an item on eBay's Web site -- www.ebay.com (http://www.ebay.com) -- they specify the maximum they'd be willing to pay for it, say $100. EBay automatically compares that bid with what others offer for the product. If the next-highest bid is $99 or lower, the $100 bid wins.

In many cases, the suit claimed, eBay tricks the person offering $100 into paying more. It said the company often sends them a note informing them that while they currently have the highest bid, they should consider upping it in case someone else offers more.

As soon as the person states a higher maximum bid, the suit claimed, eBay declares them the winner. But instead of charging them $100 for the item, it said, it bills them $102.50, even though the second-highest bid remained less than $100. The amount of the inflated charges vary, according to the sale price of the product, the suit claimed.

Ina Steiner, editor of AuctionBytes, a Massachusetts publication that tracks auction Web sites, said she has heard gripes from some people who think the prices they paid for eBay items were too high.

``Occasionally we will get complaints where people feel they bid against themselves because of how the eBay system works,'' she said. But those problems may simply stem from confusion over eBay's auction policies, Steiner said.

Lerach, Coughlin also filed a class-action suit last week accusing computer manufacturer Dell of using bait-and-switch techniques. But Reed Kathrein, who helped file both suits, said the two suits were unrelated and not part of an effort by the firm to target technology companies with consumer cases.


So guys, does this sound familiar?


02-25-2005, 08:07 PM
Yes. If successful, the company and buying public will foot the bill, the complainants will make a dollar three eighty and the lawyers will walk away with the rest of the millions that might be awarded.

Class action suits are infinitely more evil than eBay ever will come close to being, Nigerians and all.

02-25-2005, 08:20 PM
Including, but not limited to, nude, legal,
dyslexic, lesbian, skydivers belonging to organizations promoting human rights, dignity, fair trade, fair play, fore play (golf term?), replay and play-it-again-Sam.

3 Phase Lightbulb
02-25-2005, 08:30 PM
This doesn't make any sense:

"As soon as the person states a higher maximum bid, the suit claimed, eBay declares them the winner. "

The auction has to end before you get declared the winner... I only WISH Ebay would end an auction early before all the mad inrush of bids comes in at the last 5 seconds..

It sounds like someone didn't know how Ebay works but went and filed this lawsuit anyway.


02-25-2005, 08:52 PM
This is exactly the type of lawsuit that needs to be regulated. They are fishing for dollars. Lerach/Coughlin is well known for filing suits that have little to no merit. Somehow, they are able to scare companies into settling or risk being nailed by a jury in a sympathetic court.

I have two checks sitting here from class action suits I apparently was awarded funds from. In both cases, Lerach/Coughlin was the class action laywers. Their fees were in the hundreds of millions. My cut, for being a consumer so 'badly' injured by Exodus Communications ($0.27) and the other was some random company I had no idea I was a customer of ($0.13). Both cases, it cost more to send me the check than the check was worth.

My bet: The court throws this one out. Auctioneers are agents for the selling party, and are supposed to get as high a price as possible for the goods being sold.

02-25-2005, 09:49 PM
You know this is funny... but this just happened to me. I bib $100.56 on a item... was noticed as the hight bidder. Seen that I was only .06 up and went to up my bid to $103.57.

Your current bid: US $100.56
Your maximum bid: US $100.56
Current price: US $100.56

Had to leave so I shut off putter.. when I get back look at mail... I "WON" but look at this.

Sale price: US $102.50
Quantity: 1
Subtotal: US $102.50

No more bidders just me... they proied my own bid. Honest to God I even made a notice of this to the seller when I asked for total.

From email sent

<font face="Verdana, Arial" size="2">Hi final purchase should of been $100.56. I up my min... after bidding and the freaky ebay proxy system somehow bid against my own winning bid. I had to leave and just noticed it.... boy ebay will do anything for a few more pennies on the final value fees.
Any ways please send me a total and I'll send payment. Thanks Tim</font>

This is not a spoof... I'm not pulin' your legs... it really happened just like that. Oh well the gears and 59B chuck are worth the money... all the other bars and tool holder I don't need I list and sell back. Maybe I'll get a buck or two more from the next guy... it'll all work out in the end if the legal vermom would just let it.


02-25-2005, 10:46 PM
Hey Tim,

If, when you placed your 1st bid you were only $.06 above the previous bid, then your bid wasn't at the next bid step. When you rebid, your bid was automatically bumped up to the next bid step. For example, If the bid was $99 and you bid $100.06, and the previous bidder had proxy bid $100, then you would have the high bid at $100.06 even though the next minimum bid amount might be $102.50. When you up your bid it takes it on up to the next bid step. If the previous high bidder had bid $100 and that was where the bidding was then your high bid would have had to be $102.50. I am not very good at explaining this but what happened to you is perfectly normal and was not Ebay trying to dupe you. I am not sticking up for Ebay, Lord knows they have messed me around enough in the past.

02-26-2005, 12:02 AM
EBay has minimum bid increments that many bidders aren't aware of. Under $10.00, it's 10 cents. $10-$100 is $1.00. $100-$1,000 is $2.50. Over $1,000 is $25.00.

I bid only during the last few seconds & always bid an uneven amount (like $109.89). That way a bid at $112 or $113 will lose. But $113.40 will beat me.

02-26-2005, 12:52 AM
&lt;rant ON&gt;
Sure eBay is chock full of greed, but the thing that drives up prices and fees much worse than the nickel and diming that eBay might try are the goofballs that start five hours before an auction's end to place their bids. They aren't shills either, just dumbasses. They place a bid, notice an hour later that they were outbid so increase by $5 increments until they're the high bidder again (by $1 I guess), notice later that they are again outbid (surprize, surprize http://bbs.homeshopmachinist.net//rolleyes.gif.) and do it again. They'll do this until the last couple minutes, so why not just wait and snipe? Why drive the price up for yourself or others out of stupidity? It's good news for the seller, so at least somebody's happy, but I've seen it cost the buyer a couple hundred dollars or so more than it otherwise would have. Sometimes these jugheads win.
I don't get it. Quit shooting yourself in the foot. Try filing a class action suit against the bidding ignorant who help eBay make more than they ever could by trying to conciously shave a few more cents off the top. eBay is just a wealthy target for lawyers.

OK not really. eBay's greed sucks too, but still...

&lt;rant OFF&gt;

[This message has been edited by vinito (edited 02-26-2005).]

Alan in Oz
02-26-2005, 04:20 AM
While its appreciated that bidding early can effect final prices those who reside outside the USA may have to bid early either beacuse of time difference or often unreliable net connections, can be out for many hours. While I bid on little in the US there are some small items (larger ones cost too much in postage) that we simply dont see below the equator. The internet has internationalised many aspects of everyday life.

02-26-2005, 04:33 AM
They should not make you bid against yourself. If your bidding against sombody else the bid increment works fine but if your just upping your max bid it should not increase your bid.

Your Old Dog
02-26-2005, 07:42 AM
I use www.esnipe.com (http://www.esnipe.com) . It allows me to stop/cancel bidding if I check back on an auction and see someone is shilling the item up. When I see a bunch of (0) and (2) historys for high bidder then I just figure it's the seller trying to bid up his item.

esnipe also has these "bid groups". Allows you to creat a "lathe" folder, bid on 10 differant lathes at once and it kills all remaining bids once you win any lathe auction. You can kill an esnipe bid on ebay as late as 20 minutes before the end of the auction. My esnipe bids are set to take place at 4 seconds before auctions end.

I think eBay fees are about right for me. I have sold s--t I would have had to give away because a newspaper add would cost me far more to sell item. I'm banging this out on a beautifull Sony 19 inch LCD screen I paid for ($950) with money made from junk sales on ebay. Example, a 1984 Weatherby Arms 20th anniversary gun brochure handed to me when I walked into a gun store went for $44.00. A broken Nikon 990 camera listed for parts, $75.00 http://bbs.homeshopmachinist.net//biggrin.gif


3 Phase Lightbulb
02-26-2005, 11:27 AM
I always bid ONCE on an auction within the last 5 seconds...


02-26-2005, 12:10 PM
<font face="Verdana, Arial" size="2">Originally posted by jimfun:
They should not make you bid against yourself. If your bidding against sombody else the bid increment works fine but if your just upping your max bid it should not increase your bid.</font>
jimfun...exactly. The point I was making... I was the high bidder but thought I bump up the max bid to hedge against the "Snipers" with a oddball ending cents of .57 to boot. Also why did the bid not go up to $102.56... Ay that would of been the min bump up in the bid... think about that one.

a3990918... If your the high bidder and you up your max... it should have no effect on what your min winning bid is... proxies only bid on your behalf when some othere ID bids against your high bid... or at least thats the way the state it... otherwise it be a none stop run aginst yourself.

As for the sniper bid sites who's ta say they'er not being used to run bids up in a shilling fashion... it sounds like you can have them bid at any time during the auction on any "bid groups" and then cancal the run up.

As for the "goofball" as mentioned earlier... most only hate em' when they are bidding on same item that they wanted... but luv em' when they are bidding on thing your selling. Me I like the goofballs either way... I place my bid and see what happens... if I lose and it goes for the moon I know there are people watching it saying "I have one of those" and will list it along with six others who thought the same thing. http://bbs.homeshopmachinist.net//wink.gif

As for ebay... they'll nickel and dime ya ta death... but it's better then the local paper. And it gives us all somethin' to betch about in common no matter what the local... north... south.. east or west... mention ebay and you'll hear about the time.... http://bbs.homeshopmachinist.net//eek.gif

Oh well... guess I'll go look for a ******. What... think I'd tell ya bunch of snippin' goofball's http://bbs.homeshopmachinist.net//tongue.gif

Tim http://bbs.homeshopmachinist.net//biggrin.gif

[This message has been edited by Tinkerer (edited 02-26-2005).]

02-26-2005, 09:20 PM
Sometimes I bid against myself to make sure I get the item. It's easy to do with two computers and a timer. The first bid goes in 7 seconds before close, second bid goes in 2 seconds before close. If no one else bids higher or has a higher proxy, the first and second bid are exactly the same. Often someone will snipe my first bid, but only a higher proxy will beat the 2 second bid.

Barry Milton

Your Old Dog
02-26-2005, 09:45 PM
What if you lived on, say, the East Coast and the eBay auction takes place on the West Coast. If you did perhaps think there was something immoral about using a sniping client, how could you put in a competive timely bid with the boys on the Left Coast. Is there some way of pinging the system to get your timing down so you could reliably let your bid fly just prior to the auctions close and still get it in? I'm seeing way to many bidders with (O) historys in auctions these days and that really looks fishy to me. (Like the seller trying to up the bids).

esnipe is a viable way for me to have the exact same advantage timewise as the guys out west. I don't have a problem with that and besides, I've lost my fair share of auctions using this system because you can't get around their higher bid, just gets your bid there with theirs.

The biggest feature I like about sniping is the one I noted earlier, the group folders where you can bid on several similar items at once and kill the balance after you win one of them. This works for the benefit of the sellor as much as the buyer.

02-26-2005, 11:15 PM
Auction fever has hit Ebay big time,simple as that.It has become over populated with idiots that pay way too much.

But that is just like voice bids,went to an estate sale today,out of 298 items only one sold for less than new,fools.Seen a $19.95 trailer jack go for $50.00,real smart guy

I don't think there are too many deals left on Ebay.

[This message has been edited by wierdscience (edited 02-26-2005).]

02-26-2005, 11:22 PM
Ray, totally agree with your post. I only mentioned that I bid twice because eBay has never raised my first bid UNLESS someone upped that bid.

If you look in the lower left corner of any eBay screen, there's a tiny line that says "eBay official time". Click on that, then keep refreshing the official time screen and you can get the timing down to with 2 seconds with a moderately fast connection (my ISP service is 1350kbps download, 256kbps upload).

02-26-2005, 11:31 PM
WeirdSci, my wife wishes I didn't find the stuff on eBay. But every day, somehow, there are two or three gotta have items at 90% - 97% discount from retail.

Any time newbies are bidding, all bets are off. Maybe they learn by paying 150% of retail, hopefully on one of MY auctions!

02-27-2005, 12:01 AM
<font face="Verdana, Arial" size="2">I bid only during the last few seconds & always bid an uneven amount (like $109.89). That way a bid at $112 or $113 will lose. But $113.40 will beat me. </font>

LOL... You've got to be kidding. If a proxy was in at $112 or $113 and yours came in at the last few seconds for $109.89, you lost brother. No doubt about it. The winning bid is always the highest bit. Period.

02-27-2005, 08:29 AM
I see an advantage with the folder for bidding on multiple items, but all the other schemes will not work any better than posting your best bid and waiting to see if you are successful.

Wait as long as you are comfortable, and bid. If someone has a higher bid, he wins, if not, you win.

I see all this talk about people with 0 feedback being shills, or screwing things up in general. I wonder how the "experts" who pan them managed to start on eBay with a high feedback.

If you want to see some real crazies, go to a few live auctions. That is where you will see auction fever at it's best. Yesterday, I picked up 11 brand new Mitutoyo 1" digital micrometers at $25.00 each. A couple of items later were 6 or 7 Fowler Chinese dial indicators. Some guy bought these all at $40.00 each.

A big advantage with eBay is it allows breathing room for the bidder and gives him a chance to research the item, compare prices and otherwise act intelligently. Those who do will get bargains.

02-27-2005, 10:28 AM

02-27-2005, 03:48 PM
I snipe and am proud of it. Watch digital cameras, some idiot will bid on a camera that has been selling for $200, 20 times or more, with $2-$5 bids, raising the price to $150. Then when they are the highest bidder by only $2-$5 above the previous higest bidder stop bidding 4 days before the end of the auction. Do they really think they are going to win? All they are doing is driving the price up to see how high your bid was. I can accept 5 or 6 bids by one bidder but these guys just really irratate me.
I once found an item at the end of it's auction, bid on it and won. The previous high bidder wanted it really bad. He even went so far as to email me to threaten me. He then started to search for my id just so he could bid against me and drive up what I paid for it. So now I snipe almost every auction.