The biggest issue here is lack of timely communication
I think most would understand a glitch or problem and the need for an auction house to address it. Not clearly and rapidly communicating with your clientele about it is really poor business practice. I think the idea of rolling bids back to what they were at 10PM is a good one albeit a little too little a little too late. Sorry to all those affected by this - I placed a single bid and let it go at that - so wasn't affected personally, but I feel your pain and frustration.
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