Bidding on your own auction 7 7

[Lightning55]

On 6/27/2024 at 12:11 AM, Tony S said:

I believe this issue of shill bidders and legality and morality has nuances to it.  Legally - in at least some states (and for sure the ones auction houses - like Heritage) locate in it appears to be based both on intent and on what has been disclosed. 

Shills only seek to drive up the price. They do not want to win any of the items they bid on. This looks to be illegal everywhere. Including say Texas, where Heritage is located. 

But if it is stated in the terms of the auction house or listing or event that "the owner, consignor, or agent thereof has reserved the right to bid" - well there you have it.  And Heritage (the only auction house I've looked over all the fine print in the agreement) says just that. Consignors can bid on their own lots. It's a minimum bid if done in writing before the live auction (and they maybe pay a reduced fee if the win their own lot) and if done during the live auction and they win they pay the full fee. Heritage also clearly states that "From time to time, the Auctioneer, its affiliates, or their employees may place bids on lots in the Auction." Auctioneer, affiliates and employees. That pretty much covers everyone, right? 

So... IMHO, shilling is wrong. Put it in an auction - get what it sells for is honest. But on the other hand  - WHY do only the big auction houses get to shill and it's OK?  Shill Legally and doesn't seem to affect their reputation or business. 

My question above is a bit rhetorical. I've answered already. It is very nuanced.  They have told you - if you read all the fine print - they might have associates or the auctioneer or employees of the company bid.   They have told you the possibility exists the consignor might bid in some fashion - creating a hidden reserve.  If one was to list  books on eBay and say all this in the description it would be legal (though eBay still might shut the listing down because legal or not it violates their listing policy) But even if eBay didn't take down the listing anyone reading the description would be much less likely to bid. 

Heritages listing agreement. https://www.ha.com/c/ref/terms-and-c....zx?view=terms

 

Maybe they have the clause to allow their employees, affiliates, etc. to be able to bid on something that they want for themselves.  Like stipulating it so that it isn't construed as a conflict of interests.  There are probably quite a few comic-minded people on the payroll and in the executive suite who would like to participate, especially if a one-of-a-kind item hits the podium.

As compared to casinos, which I believe completely ban employees from betting in the casino, probably out of fear of collusion.  You get fired if they catch you.

But I could see how allowing the auction houses to bid, publishing that it is ok for them to bid, could nefariously be used to generate higher bids. Which would be a conflict of interests to those bidding.  The consignors wouldn't care, more money for them.

Edited June 27 by Lightning55

[Heronext]

On 6/27/2024 at 9:50 AM, Funnybooks said:

OP also said this and takes this stand......so, no judgment......

• AUTHOR

Posted 9 hours ago

Perhaps regardless of intent increasing the price during an auction can seem a bit unethical.

Still not convinced though. I can’t see much of a difference between starting an auction with a reserve and deciding what you want your reserve to be during the auction. 
 

Doesn’t seem like shill bidding to me. 

When people talk about safe spaces, I like to change the subject to space safes.

[Lightning55]

Damn, i am getting tired of having to sign into this site so often, on my phone and/or desktop.  Even a few hours apart, sign in again, please.  Ridiculous.

[MAY1979]

On 6/27/2024 at 10:50 AM, BlackOut21 said:

I’ll ask my wife her thoughts when she gets home but…is a bid considered a contract?

If yes, then I can clearly see why placing a bid on your own auction is clearly unethical and wrong. 

If no, then. Idk. It’s hard for me to say that it’s truly unethical to bid on your own auction. 

More times than not, Ethics and Morality are mutually exclusive from Legality.

Regardless of any "legality", perhaps ask your wife what she thinks St. Peter will decide when times comes to tidy up the ledger.

Comic dealers and sellers these are only true keys you need to be concerned with!

 

Edited June 27 by MAR1979

[whisp]

You shouldn't be bidding on your own auctions and in my mind that is manipulation and scamming.  You don't want to sell it under a certain price then put a reserve or just put a price on it and sell it straight up instead of playing games.  

 

How is this even a thread!

[Dark Knight]

Just set a limit of what you're willing to pay for the book and don't bid a cent over. Problem solved.  Unfortunately, there is no way of knowing beyond a reasonable doubt that shill bidding is taking place in these auctions unless a full blown investigation is taking place. I do, however, have my suspicions that at least one of the major auction houses that I've done business with over the years may be shill bidding. At least the more expensive books.  

[ThothAmon]

From what I understand auction houses sometimes make guarantees to consignors to entice them to auction specific pieces. The auction house obviously believing the piece will sell for more than the guarantee. Is the ethics different if the auction house itself, and not the consignor/owner, bids the item up to an acceptable price, willing to add the piece to their own inventory if their guarantee was overly optimistic.   Ask yourself, how do the motivations of the other bidders really matter?

Edited June 27 by ThothAmon

[Heronext]

On 6/26/2024 at 9:33 PM, ageofsilver said:

This depends on the auction contract, which should conform to applicable laws and be made known to buyers. If it is legal for the seller to buy his own book back and proper under the written auction agreement, shadroch’s scenario seems reasonable to me. Of course, those wanting to buy a nice Baker at 50% off might be a bit miffed. The best plan for a seller would be to have a reserve, but the auction house may not allow this. 

On eBay, you can also cancel an auction up to the last hours if you don't like what it's currently going for.  In terms of reserves, I think they still charge if your item doesn't sell, which is a disincentive to using that format.

Without commenting on what should be ethical, moral or legal, I can speak about what I am personally ok or not ok with. I think everyone on eBay should be allowed a one-time shill bid, one "mistake" if you will.  That seller should then learn their lesson - they need to use a reserve, experiment with BIN formats, do better price and venue research and be prepared to reset their expectations.

EBay has sold the idea of auction fever to the masses, both potential buyers and sellers, somewhat irresponsibly I think, doing none of the work of the traditional auction house model of promoting YOUR items and ensuring a critical mass bidding pool.  Some sellers step into that without realizing what they are getting into.  Of course, professional and habitual shill bidding is not cool.

[wiparker824]

On 6/27/2024 at 11:25 AM, Heronext said:

On eBay, you can also cancel an auction up to the last hours if you don't like what it's currently going for.  In terms of reserves, I think they still charge if your item doesn't sell, which is a disincentive to using that format.

Without commenting on what should be ethical, moral or legal, I can speak about what I am personally ok or not ok with. I think everyone on eBay should be allowed a one-time shill bid, one "mistake" if you will.  That seller should then learn their lesson - they need to use a reserve, experiment with BIN formats, do better price and venue research and be prepared to reset their expectations.

EBay has sold the idea of auction fever to the masses, both potential buyers and sellers, somewhat irresponsibly I think, doing none of the work of the traditional auction house model of promoting YOUR items and ensuring a critical mass bidding pool.  Some sellers step into that without realizing what they are getting into.  Of course, professional and habitual shill bidding is not cool.

If we’re talking about eBay specifically and the uneducated seller who made an oopsie and their book went lower than they were comfortable with they already have get out of jail free cards. They just don’t send the item. I have got my share of items I won on eBay over the years where they clearly went low and the seller messaged they “can’t find the item now, sorry”. Not that this is right either, but I think this is far more common for the one time made a “‘mistake” group. Could be wrong but I believe to shill bid requires far more effort on eBay, to the point I’d imagine most that are doing it are professional and habitual at it.

[MAY1979]

On 6/27/2024 at 2:41 PM, wiparker824 said:

If we’re talking about eBay specifically and the uneducated seller who made an oopsie and their book went lower than they were comfortable with they already have get out of jail free cards. They just don’t send the item. I have got my share of items I won on eBay over the years where they clearly went low and the seller messaged they “can’t find the item now, sorry”. Not that this is right either, but I think this is far more common for the one time made a “‘mistake” group. Could be wrong but I believe to shill bid requires far more effort on eBay, to the point I’d imagine most that are doing it are professional and habitual at it.

Many sellers right on this forum have multiple eBay accounts. Some of them even openly boast about it.

Edited June 27 by MAR1979

[Buzzetta]

On 6/26/2024 at 9:27 PM, Funnybooks said:

Shill bidding is considered a form of Internet auction fraud as it "illegally drives up prices and defrauds consumers."^[4]

• In 2004, Jerrold Schuster, Darek Szydlowski and Francis Komsisky, Jr. pleaded guilty to shill bidding under New York's Anti-Trust Legislation, specifically Combination in Restraint of Trade and Attempted Combination in Restraint of Trade.^[4] Schuster faced up to 4 years in prison for Combination in Restraint of Trade and $50,000 in restitution.^[4]

• In the UK, a man could have been fined up to 50,000 pounds, 10,000 pounds for each violation, due to eBay shill bidding under the Business Protection from Misleading Marketing Regulations and Consumer Protection from Unfair Trading Regulations.^[5] However, he was only fined 3000 pounds and sentenced to community service.^[6]

• In 2010, within the domain name industry, SnapNames settled a class-action lawsuit due to shill-bidding auction practices for $2 million.^[7]

@shadroch Doesn't Heritage allow for shill bidding?  I am curious then as to why NYS has never gone after Heritage as it also has offices in NYC aside from the ones in Texas. 

 

Wasn't there a comic book dealer or art dealer that was found to be shill bidding or having his customers shill bid in Heritage Auctions as well? 

[Buzzetta]

On 6/27/2024 at 2:56 PM, MAR1979 said:

Many sellers right on this forum have multiple eBay accounts. Some of them even openly boast about it.

I do.  I have two or I should say, I control two.

Neither has ever bid on items from the other account. 

 

EDIT: It's always been BIN anyway. 

Edited June 27 by Buzzetta

[Funnybooks]

On 6/27/2024 at 3:03 PM, Buzzetta said:

@shadroch Doesn't Heritage allow for shill bidding?  I am curious then as to why NYS has never gone after Heritage as it also has offices in NYC aside from the ones in Texas. 

 

Wasn't there a comic book dealer or art dealer that was found to be shill bidding or having his customers shill bid in Heritage Auctions as well? 

Heritage, NYC,  satellite location only allows you to view select items coming to auction or purchase select items not for auction.
 

Allegedly, it was a certain spiderman-centric dealer

Edited June 27 by Funnybooks

[The Less Blob]

On 6/26/2024 at 9:02 PM, shadroch said:

I'm not sure what ethics has to do with it.  

Suppose I consign a book to Auctionsareus.  I agree to a 10% consignment fee. It's a $500 book but everyone is sleeping and it is at $50 with one minute left.  I bid $70 and no one tops it. I pay the $70, the auction house gets it's $7 commission and I don't lose hundreds on the sale.  I have a contract with the auction house and honored it.  What contract or obligation do I owe the other potential buyers?

If you win your own auction, not illegal. If you pumped up other's bids resulted in someone else winning an inflated auction, it may be

[The Less Blob]

Penalties for eBay Shill Bidding and Penny Bidding

Penalties for shill bidding vary depending upon whether those accused of involvement in the scam face state charges or federal criminal charges. When the eBay shill bidding is part of a large scheme and involves other crimes like forgery or the sale of counterfeit goods, penalties become more serious.

Shill bidding has resulted in criminal prosecutions in New York State under the Donnelly Act. The Donnelly Act, found in New York’s General Business law Code section 340-347, is an antitrust law that prohibits bid rigging and price fixing. The Donnelly Act has been used by prosecutors against people accused of shill bidding in online auctions. Being charged under this Act can result in a maximum four year prison sentence, and a fine of $100,000 for individuals and $1 million for businesses.

Shill bidding may also be considered a form of wire fraud, which is a federal offense under 18 U.S. Code Section 1343. Maximum penalties for the crime of wire fraud can include two decades imprisonment.

-------

There may be an exception if all the shill bidding is under the reserve amount just to get the reserve to be hit. The crime happens when someone is "harmed". None of this should be viewed as legal advice from me. Do your own research. 

[Lightning55]

On 6/27/2024 at 2:21 PM, ThothAmon said:

Ask yourself, how do the motivations of the other bidders really matter?

It matters. It matters a lot.

An auction is a competition to purchase an item at the lowest winning price. It's supposed to be a fair contest, even playing field, people bidding in earnest. If someone is pushing the bid up fraudulently, causing you to pay $500 for something that legitimately would have ended at $400, they just stole $100 from you. So yeah, it matters, if it's rigged.

[shadroch]

On 6/27/2024 at 12:10 PM, Funnybooks said:

Heritage, NYC,  satellite location only allows you to view select items coming to auction or purchase select items not for auction.
 

Allegedly, it was a certain spiderman-centric dealer

When they opened that gallery, they started collecting NY Sales tax on their auctions.

[Buzzetta]

On 6/27/2024 at 3:10 PM, Funnybooks said:

Heritage, NYC,  satellite location only allows you to view select items coming to auction or purchase select items not for auction.
 

Allegedly, it was a certain spiderman-centric dealer

 

On 6/27/2024 at 3:44 PM, shadroch said:

When they opened that gallery, they started collecting NY Sales tax on their auctions.

Another board member and I actually attended a live auction segment held in a live bidding room at Heritage's offices in NYC as late as 2016.    You could bid there.

[Lightning55]

On 6/27/2024 at 2:56 PM, MAR1979 said:

Many sellers right on this forum have multiple eBay accounts. Some of them even openly boast about it.

This is common, and usually legit. Some people have a buying account and a selling account. Or multiple selling accounts because it has been observed that eBay likes to throttle sales if you are doing too well, spread the wealth type of thing. So to counter that, people open multiple stores.

And maybe each store sells stuff category-specific to that store, instead of a hodgepodge of goods in one store. Like specialty stores. Your eBay fees can be lower having multiple small stores than paying for an Anchor store.

There are many practical reasons to have multiple eBay identities. 

[shadroch]

On 6/27/2024 at 12:41 PM, Lightning55 said:

It matters. It matters a lot.

An auction is a competition to purchase an item at the lowest winning price. It's supposed to be a fair contest, even playing field, people bidding in earnest. If someone is pushing the bid up fraudulently, causing you to pay $500 for something that legitimately would have ended at $400, they just stole $100 from you. So yeah, it matters, if it's rigged.

A fair contest has rules, correct?  If the rules of the auction site allow people to bid on their own products, is that fair or unfair?  If a bank was auctioning your car after repossessing it, wouldn't you bid on it if you could?