A class action lawsuit has been filed against eBay, claiming that eBay’s bidding system defrauds sellers of potential income.
Since its launch, eBay’s bidding system has allowed bidders to privately place a maximum bid they are willing to pay for an auction. The highest bidder may win the auction by only one incremental amount above the second highest bidder’s maximum bid.
In other words—using eBay’s example—if Tom places a maximum bid of $12 on an item, but Laura places a maximum of $15, then Laura becomes the highest bidder. Laura’s bid supersedes Tom’s at $12.50. If no other bids are placed after that moment, then Laura is the winner for $12.50.
The lawsuit is based on the premise that the seller is cheated out of the full $15 Laura was willing to pay.
The lawsuit reportedly states that eBay “inject[s] itself into the transaction by intercepting the bid amount before it is received by the seller.”