Seller Challenges eBay Auction Process

SAN JOSE (CN) - A disgruntled eBay seller claims in a federal class action that eBay's automatic bidding process "intermeddles" with buyer-seller relationships by increasing buyer bids by proxy, hiding bid maximums and shortchanging sellers.

Marshall Block claims that eBay violates its own user agreement by placing bids for prospective buyers.

When a bidder sets a maximum bid on an item up for auction, eBay's system automatically bids on his behalf in increments up to his or her stated maximum. If a bidder's maximum is exceeded, the new high bidder leads the auction. If no one else bids on or exceeds the maximum set by a bidder, the winning bidder pays only the final auction price, not the preset maximum.

Bid maximums are hidden from sellers and other bidders. By keeping maximum bid

amounts secret from sellers and only transmitting as much of the bid as is necessary to keep the bidder in the auction, eBay shortchanges sellers "because the bid amount relayed to him by eBay is less than the actual bid amount placed by the bidder," Block claims.

Block says that if a bidder offers a maximum bid of $100 and wins the auction, he should have to pay $100, because on eBay a bid is a "contract." So, Block says, if an auction closes at $95 or less, the buyer should be liable for the entire $100 maximum bid.

He claims eBay violates user agreements by involving itself in the transactions between buyers and sellers, so that seller class members are "unable to receive the actual bid amount placed by the high bidders for the item offered for sale by the seller and to which these bidders committed themselves to pay and buy if they were the winning bidders. ... Plaintiff and the putative class members have been shortchanged and damaged because the price they were forced to accept for their listed items was less than the price bidders actually agreed to pay should they win the auction."

Block seeks restitution and punitive damages for breach of contract, unfair business practice and unjust enrichment.

He is represented by Roy Katriel of San Diego.

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