Should Sellers’ Friends & Family Be Allowed To Place Bids On eBay Items?

eBay now allows acquaintances of the seller to bid, so long as they follow the rules.

eBay now allows acquaintances of the seller to bid, so long as they follow the rules.

For years, eBay forbid friends, family and employees of a seller from bidding on that seller’s items out of concern about “shill bidding,” i.e., that they would increase the price with no intention of buying. Then during the summer, eBay quietly changed that policy to make it more flexible.

The revised Shill Bidding Policy now defines the forbidden practice as “when anyone — including family, friends, roommates, employees, or online connections — bids on an item with the intent to artificially increase its price or desirability.” But unlike the previous policy — still in place outside of the U.S. — eBay now no longer outright prohibits all of these acquaintances from bidding.

It’s still against the rules — and illegal — for sellers to use a secondary account to bid on one of their items.

But friends and family are now considered as “Restricted” bidders, in that they are allowed to bid “as long as you don’t intend to artificially increase its price or desirability or violate our Feedback manipulation or search and browse manipulation policies.”

Though the eBay page on the Shill Bidding policy makes no specific mention of employees now being allowed to bid, the site’s tutorial on the subject says employee bids are still considered shill bids.

Violators of the policy face penalties running the gamut from cancelling the sale to reporting the seller to law enforcement, as deliberate manipulation of auction prices by the seller is against the law.

While the revised policy will cut down on cancelled sales and suspended accounts for cases where the allegations are unsubstantiated or nitpicky — a seller with thousands of Twitter followers probably shouldn’t be penalized just because one of them bids on an item — some in the eBay community are concerned that the Shill Bidding policy has been made more flexible at the expense of the law.

For instance, the folks at FidoSysop wrote back in June that “regardless of eBay Policy – Shill Bidding is Against The Law. And there are severe consequences in store for anyone convicted of this crime. eBay may think they are God, but they can not overrule or circumvent U.S. Federal Law.”

Obviously, simply knowing the seller does not make a bidder a shill, and so therefore not every instance that violated the previous policy was actually a violation of federal law. But at least the old policy drew a hard line that — while arguably over-cautious — provided guidelines that didn’t leave much room for interpretation.

That lack of black/white seems to be the major problem with the revised policy.

“[A]s with everything related to eBay, it’s how the policy will be enforced that’s the sticking point,” writes EcommerceBytes.com’s Ina Steiner. “Sellers remain just as susceptible to accusations of shill bidding — how will eBay be able to determine the intent of the bidder?”

It would seem to us that if eBay is going to relax its policy to allow for friends, family and other acquaintances to bid on items, it should provide a more detailed description of what merits a violation other than the rather cut-and-dry examples given in the tutorial (most of which deal with a seller bidding on his/her own item).