Seller Sues eBay Because Bidders Don't Always Pay The Maximum

We’re sure that any number of you have set up automatic bidding on an eBay auction and ended up winning an item without getting anywhere near the maximum you’d have been willing to pay. But one seller on the auction site thinks eBay’s automated bidding system is unfairly biased in favor of buyers and has filed a lawsuit.

The suit, filed in the U.S. District Court in Northern California on behalf of an Arizona man, gives the example of someone who is willing to pay up to $100 for an item. But even though eBay’s automated system knows this maximum, it only incrementally increases the buyer’s base bid to the level at which it beats other existing bids. So if, because of this system, the buyer only pays $95 for the item, the plaintiff believes “the seller is shortchanged $5.00 solely as a result of intermeddling by the purportedly neutral auctioneer.”

From the suit:

Instead of acting as a neutral venue that is not affiliated as an agent for either the seller or bidders, eBay does just the opposite by engaging in a proxy relationship with bidders pursuant to which eBay acts as an agent for the bidders, and bids on their behalf up to the amount of the bid entered by the bidder. All the while, eBay keeps secret and hidden from the seller, the bidder’s actual bid that was entered on the eBay listing page for the item being offered for sale in the traditional format… eBay’s bidding system represents an alliance between eBay and bidders to the detriment of eBay sellers.

The lawsuit alleges that eBay is in violation of California Business and Professions Code, as well as the state’s False Advertising Law, since the website claims to be impartial.

The suit seeks class action status and is asking for the court to “create a common fund to pay all of the claims submitted by Plaintiff and the class members… and to compensate all members of the class for their damages and injuries.

You can read the entire complaint at CourthouseNews.com