Q. What is eBay doing about shill bidding?
A. eBay developed the industry's first shill bidding detection tool in early 1999 in order to analyse bidding patterns over multiple listings. We've learned more about shill bidding detection over the past year and we've put that knowledge into the next generation shill bidding detection tool that was recently implemented. We have already started making tools that will assist us in being proactive in detecting ongoing shill bidding and plan to launch these later in the year.
I'd guess that as well as doing the obvious checks for matching addresses of addresses/credit cards on seller and bidders accounts. They also check for repeated bidding between pairs/groups of user accounts, bidders that rarely win anything, bidders but have a high proportion of bids against 1 or 2 sellers, possible links to account details previously reported for shill bidding etc. These can then be flagged up for closer investigation.
I struggle to see why eBay would be that bothered about shill bidding (aside from alienating buyers where it's conspicuous) as ultimately, higher final prices means more cash for eBay in final value fees.
They're more worried about making sure they don't get cheated out of fees (fee circumvention, stopping trading from outside of eBay, ensuring paypal is widely used etc)
If anything, with private listings and the obscuring of bidder/buyer's ID these days, shill bidding is surely more of a problem than ever?
Ebay rules are very strong and their methods are very secure.
if you receive bids on items on more than one occassion from the same user, or the ip address is the same as yours, then this is registered. If this happens more regularaly than not, then the accounts get blocked once certain calculative measures are employed and show a correlation..
Although looking from the sellers side, it's not actually so unfair imo. Ebay auctions are second price auctions (economics anyone?)...and so buyers actually paid less then their maximum valuation.. this is why you can get bargains over ebay because you only pay the valuation of the second highest bidder. From the seller's side, his item is always going to worth more than the winner pays since his maximum bid is clearly higher than the item end price. In a way, shill bidding allows him to gain the maximum value for his item (the market price), which it is worth...So it's not as unfair as most people think it is...
on the other hand ebay rules clearly prohibits it so by agreeing to selling on ebay, you are making the decision to sell it at the second price and so in this way it's "wrong".