Class action lawsuit against Ebay

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Posted By: Dylan

I received in my Ebay inbox information on a current court case in the SUPERIOR COURT OF THE STATE OF CALIFORNIA. Its a class action suit against Ebay alleging that eBay's automatic increase in certain circumstances of an existing bid where no competing bid had been made and increasing the bid was not necessary to meet a minimum reserve was improper and artificially inflated the bids of eBay buyers, thus causing damage to eBay buyers.
So when you are already the high bidder and you wish to increase your max bid, ebay will increase your current bid even though no one has bid against you correct? I know it doesnt amount to much money per Ebayer but probably amounts to a nice chunk of change overall for ebay.

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Posted By: Paul

This is how I think it works: if you are the high bidder on a lot, but your high bid is an odd amount, and then you bid again, ebay raises your bid to the next regular increment.

For example, let's say you haven't bid yet. The current high bid is displayed as $12.00, but the high bidder's maximum bid is $15.11. You then place a bid of $15.15. You are now the high bidder at $15.15. Now, $15.15 is not a normal increment. The next normal increment after $15.00 is probably $15.50 or $16.00. But since your maximum bid was only $15.15, ebay can't charge you more than $15.15, and it lists your high bid as $15.15.

But, let's say that you then raise your own bid by placing a new bid of $20.00. Ebay will automatically raise the displayed high bid to the next normal increment ($15.50 or $16.00). In essence, ebay is erasing your $15.15 bid and replacing it with your $20.00 bid.

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Posted By: peter chao

Paul,

So basically, E-bay is adjusting the bidding history. But it doesn't appear that they are making any extra money. So what's the big deal.

Peter

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Posted By: Cat

I did that one time where I bid on a Mayo Ward card. I bid $3,012 and the previous high bidder had bid $3,000. As Paul stated, the high bid was now $3,012. I bid again to increase my max and the high bid was changed to $3,050. So bidding again cost me $38. I canceled the second bid and the high bid reverted back to the $3,012.

Although it was a little strange. The second bid, and the cost of $38, conforms to their bidding rules. The $38 was the cost in order to make sure I was the high bidder in case someone raised the bid again (no one did). I guess you have to ask yourself is it worth $38 to raise again and have a better chance to win the item (if I remember correctly I had raised my max to $3,300 on the second bid).

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Posted By: T E

When bidding without sniping, there is always a certain amount of strategy. If you look at bid history, you can tell when the high bidder is not at the right increment, meaning that you can figure out how much is needed to beat the bid. But when you raise the bid, it now shrouds the high bidder in mystery, making the next bidder wonder how high they will have to go, and possibly scaring them away. How did your experience work out here, Cat?

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Posted By: JK

Peter - you are incorrect. Ebay is making additional money. If, using the example above, no additional bids were placed except for the high bidder's own bid - then ebay has made additional money.

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Posted By: peter chao

JK,

Your right, but the high bidder knows that E-bay is going to round up, so he agrees to the additional fee. Is that accurate.

Peter

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Posted By: Dylan

Ebay has agreed to pay a settlement of 2.1 million to be distributed among charities approved by the courts. Ebay also has agreed to pay 800,000 in plaintiffs legal fees and pay settlement for plaintiffs too.
I do agree that if no higher competing bid has been made that the existing high bid should not be raised.

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Posted By: Chris Counts

I have outbid myself many times on eBay without any negative consequences. Just last week, I bid $22 for a particular Batter-up. Before that, the high bid was less than $2. I really wanted the card, so I raised my bid to $28. I ended up winning the card for less than $2 ...

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Posted By: Eric B

Using the example of the Mayo Ward above. Wouldn't most people prefer Ebay do it this way rather than the bid coming back as "You Have Been Outbid Due to Not Reaching the Next Bid Increment" at $3,000.00?