Man Sues Ebay Over Bid Process

[fourstringdrums]

Courthouse News Service

SAN JOSE (CN) - A disgruntled eBay seller claims in a federal class action that eBay's automatic bidding process "intermeddles" with buyer-seller relationships by increasing buyer bids by proxy, hiding bid maximums and shortchanging sellers.

Marshall Block claims that eBay violates its own user agreement by placing bids for prospective buyers.

When a bidder sets a maximum bid on an item up for auction, eBay's system automatically bids on his behalf in increments up to his or her stated maximum. If a bidder's maximum is exceeded, the new high bidder leads the auction. If no one else bids on or exceeds the maximum set by a bidder, the winning bidder pays only the final auction price, not the preset maximum.

Bid maximums are hidden from sellers and other bidders. By keeping maximum bid amounts secret from sellers and only transmitting as much of the bid as is necessary to keep the bidder in the auction, eBay shortchanges sellers "because the bid amount relayed to him by eBay is less than the actual bid amount placed by the bidder," Block claims.

Block says that if a bidder offers a maximum bid of $100 and wins the auction, he should have to pay $100, because on eBay a bid is a "contract." So, Block says, if an auction closes at $95 or less, the buyer should be liable for the entire $100 maximum bid.

He claims eBay violates user agreements by involving itself in the transactions between buyers and sellers, so that seller class members are "unable to receive the actual bid amount placed by the high bidders for the item offered for sale by the seller and to which these bidders committed themselves to pay and buy if they were the winning bidders. ... Plaintiff and the putative class members have been shortchanged and damaged because the price they were forced to accept for their listed items was less than the price bidders actually agreed to pay should they win the auction."

Block seeks restitution and punitive damages for breach of contract, unfair business practice and unjust enrichment.

He is represented by Roy Katriel of San Diego.

I'm sure this will get thrown out. As much as I hate Ebay, I see what they are doing as the same as someone who has a proxy bid for them. You authorize them to bid on your behalf. But even like a traditional auction, you don't bid your maximum right away.

Sounds like a guy who was screwed on auctions he thought he'd make money on and is now taking it out on Ebay.

[sneha1965]

So the guy wants whatever a bidder has as his maximum bid to be paid out even the the auction doesn't reach the maximum? GREED.

The other problem with posting a maximum price is that a chill bidder could bump the price up to see what the maximum is.

[bassman314]

I'm not sure how we can argue "unjust enrichment", given that ebay's fees are based on the final price of the item.

They take a loss using this process.

[MatticusMania]

Originally Posted by sneha1965

So the guy wants whatever a bidder has as his maximum bid to be paid out even the the auction doesn't reach the maximum? GREED.

Well, yes and no. I understand the guy's point, but it ultimately is rooted in either a) Greed, or b) a true duty to the auction process. Im betting the former, though.

In a live auction, I can't say "My maximum bid is $600" and then win the item for $400 because the person who bid before me only put down $350. The bid of $600 is a tactic used to scare off other bidders, letting them know that I have money, and this item is worth that, maybe more, to me.

Or maybe Ive been watching too much Auction Hunters.

[electracoyote]

Plaintiff will lose, even though he has a good argument.

Ebay's house, eBay's rules. They are not beholden to any pre-existing or alternate notions of how an auction "should" work.

I've seen this and similar arguments fail many times.

[MatticusMania]

Originally Posted by electracoyote

Ebay's house, eBay's rules. They are not beholden to any pre-existing or alternate notions of how an auction "should" work.

+1

[skychief]

Originally Posted by electracoyote

Plaintiff will lose, even though he has a good argument.

Ebay's house, eBay's rules.

exactly. what a waste of time. I hope they make him (plaintiff) reimburse ebay for any court costs incurred.

[etoncrow]

The seller can set a "reserve" and not accept less; so should the seller give back money which exceeds his reserve? Freakin stupid!

[sneha1965]

I was thinking more that in a live auction you have your highest bid in mind. Lets say $600 and you win at $400. The seller then can't go, "Hey what was the maximum bid you would have paid", and is then paid that amount.

I put a max bid in once and the going price shot up over $500 in less than 5 minutes. I pulled my bid and made my excuse and the bid immediately dropped to what the bid had been prior to me bidding. I call shill bidder and that's what I hate about the hold process. Even though it's against the rules people do it all the time on those who post a maximum bid. Better to watch the action and bid you highest in the last 30 seconds and see how you come out.

Originally Posted by MatticusMania

Well, yes and no. I understand the guy's point, but it ultimately is rooted in either a) Greed, or b) a true duty to the auction process. Im betting the former, though.

In a live auction, I can't say "My maximum bid is $600" and then win the item for $400 because the person who bid before me only put down $350. The bid of $600 is a tactic used to scare off other bidders, letting them know that I have money, and this item is worth that, maybe more, to me.

Or maybe Ive been watching too much Auction Hunters.

[sneha1965]

Originally Posted by etoncrow

The seller can set a "reserve" and not accept less; so should the seller give back money which exceeds his reserve? Freakin stupid!

+100,000

[MatticusMania]

Originally Posted by sneha1965

I was thinking more that in a live auction you have your highest bid in mind. Lets say $600 and you win at $400. The seller then can't go, "Hey what was the maximum bid you would have paid", and is then paid that amount.

I put a max bid in once and the going price shot up over $500 in less than 5 minutes. I pulled my bid and made my excuse and the bid immediately dropped to what the bid had been prior to me bidding. I call shill bidder and that's what I hate about the hold process. Even though it's against the rules people do it all the time on those who post a maximum bid. Better to watch the action and bid you highest in the last 30 seconds and see how you come out.

Right, in a live auction you wouldnt bid your max right off the bat. You keep in mind what youre willing to spend, and bid up appropriately. But, if the current bid is at $20, and you say $60, youre on the hook for $60. I think that is the Block's contention, that if you put in a bid you should then be on the hook for that amount. Bidding a max of $60 and winning the item for $35 is a bit disgeneous to the auction process. However, as stated, those are eBays house rules, and they make no qualms of stating so before anyone ever bids.

[GreenWithEnvy]

You are not "bidding" a max of 60. You are bidding one increment over the current bid. And you are willing to continue to increment the bid up to a max of 60. That's not disingenuous. Suppose eBay only accepted a single increment over the current high bid and rejected any amount over the increment. If you were outbid, you'd have to bid again, and so on and so on and so on. It would be a pain. The current method is a simulation of a proxy bid where you authorize a max dollar amount. Is that disingenuous? At an auction, you never pay more than the highest bid regardless of how much you might have spent for the item. Same thing here.

[sneha1965]

I see nothing wrong with the current process - and there's nothing disingenuous about it. People both bidding and selling know the rules so it's a grand waste of time suing.

[GreenWithEnvy]

I agree. I don't see anything wrong with the current process. I think that guy has no point whatsoever. I hardly consider eBay an auction site anymore anyway. The number of auctions vs. Buy It Nows must be around 10 percent overall.

[GreenWithEnvy]

By the way, I accidentally bid 5 grand on something last year when I meant to bid 500 and I didn't realize that I did that until after the auction was over. Glad I wasn't forced to cough up the 5 grand when I was the high bidder.

[MatticusMania]

I think you guys are not grasping my point. I also see nothing wrong with the current process. Its a good model for these types of auctions that can last multiple days.
I do see it as, not disingenuous (poor choice of wording), but atypical of the normal auction process where the current bid is typically known before another person places their bid. Yes, in this case the "current bid" is known, but the next person to bid, in order to win the item, has to actually outbid a prior bidders max, and not simply the "current bid".
His argument that a seller should be entitled to the winner's max bid, though, holds no water.

Originally Posted by GreenWithEnvy

By the way, I accidentally bid 5 grand on something last year when I meant to bid 500 and I didn't realize that I did that until after the auction was over. Glad I wasn't forced to cough up the 5 grand when I was the high bidder.

Yeah, that'd be ridiculous. If you don't mind me asking, how much did you win the item for?

[GreenWithEnvy]

Ha, it was for over 500 bucks. And that's when I realized that I mistyped the bid! But it wasn't too far over and I thought about it and decided to honor the bid anyway because it was the right thing to do. It was a vintage Herman Miller starburst clock, and when I received it, it was the finest condition vintage HM clock I had ever seen and that beauty is in my kitchen right now and I still admire it. So it all turned out ok.

You know, just last week, I asked an eBay seller to send me more pictures of a bass they had for sale and included my email. The seller responded with "eBay blocked your email???". And I looked, and they did indeed block my email to the seller and including an note about it being against eBay policy. So I had to give it to them piecemeal so they could send me the photos. I understand that a lot of transactions take place outside of eBay and I've done it myself, but to not be able to share your email address with the seller to get more info on the item seems extreme to me.

I was just thinking, if I don't show a picture of the clock, does that mean it doesn't exist?

[electracoyote]

As a seller, I am much more concerned about the whole lopsided "Buyer Protection" scam, and how it encourages "shoppers" to test drive your gear and then get cold feet or buyer's remorse and win a claim allowing them to return a perfectly good as-described item at considerate expense to the seller.

I have just engaged in my last high-dollar guitar transaction as an eBay seller.

That and the fees are really getting ridiculous.

[john grey]

Originally Posted by electracoyote

As a seller, I am much more concerned about the whole lopsided "Buyer Protection" scam, and how it encourages "shoppers" to test drive your gear and then get cold feet or buyer's remorse and win a claim allowing them to return a perfectly good as-described item at considerate expense to the seller.

I have just engaged in my last high-dollar guitar transaction as an eBay seller.

That and the fees are really getting ridiculous.

This is VERY true. I have some antiques that I would NEVER put on eBay for that very reason; it's a very lopsided arrangement for high-dollar items, with the potential to get ripped off viciously. That being said, I think the civil action is not the appropriate way to deal with this. There should be some competition and let the market sort itself out. Right now there is little competition on some items even though Amazon is a simple way to sell off low priced things.
Someone will eventually slay the EvilBay dragon.

[i_got_a_mohawk]

Originally Posted by electracoyote

That and the fees are really getting ridiculous.

Still significantly less than most auction houses (not to mention, wider audience, potentially greater interest).

The buyer protection thing is quite lop-sided, tho I've been on the receiving end of dodgy sellers in the past (and Paypal was pretty good in giving cover!)