Revealed: How E-Bay Sellers Fix Auctions

Hot off the Press into cyberspace, I thought readers would like this, it seems E-Bay is not as safe and fraud free as they would like us to believe, I welcome readers comments.


The Sunday Times
January 28, 2007Insight
Revealed: how eBay sellers fix auctions
Recorded excerpts of meetings with Paraskevaides: Clip 1 Clip 2

CUSTOMERS of the internet auction site eBay are being defrauded by unscrupulous dealers who secretly bid up the price of items on sale to boost profits.
An investigation by The Sunday Times has indicated that the practice of artificially driving up prices — known as shill bidding — is widespread across the site.
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Last week one of the UK’s biggest eBay sellers admitted in a taped conversation with an undercover reporter that he was prepared to use business associates to bid on his goods for him.
Our inquiries found evidence that a number of businesses — ranging from overseas property agencies to car dealerships — have placed bids on their own items using fake identities.
The cases raise questions about whether eBay, the world’s biggest auction site, is doing enough to protect consumers.

Shill bidding is against eBay rules and is illegal under the 2006 Fraud Act. However, the resulting higher prices on the site boost the value of eBay’s share of the sales.
Last November eBay changed its rules to conceal bidders’ identity — making it even more difficult for customers to see whether sellers are bidding on their own lots. Since its launch seven years ago, eBay’s UK website has attracted more than 15m customers. It sells more than 10m items at any given time.

One of the beneficiaries of the boom is Eftis Paraskevaides, a former gynaecologist, from Cambridgeshire. He has become a “Titanium PowerSeller” — one of eBay’s handful of top earners — selling more than £1.4m worth of antiquities a year on the site.
In a conversation with an undercover reporter last week, Paraskevaides claimed shill bidding was commonplace on eBay.

When the reporter asked whether he arranged for associates to bid on his own items, he replied: “Well, if I put something really expensive (up for sale) and I was concerned that it was going for nothing, I would phone a friend of mine, even a client of mine who buys from me, and say: For Christ’s sake, I sell you 100 quids’ worth of items a week . . . just put two grand on it, will you?” The reporter was posing as a seller of valuable antiquities. He inquired whether Paraskevaides could sell them on eBay and guarantee a minimum price.
He replied: “Leave it to me (laughs). Don’t call it shill bidding. Then I won’t be accused of shill bidding. Yes. I mean — I’ve got people.

“I’ve got some of my big clients who buy big items off me, I look after them. So I can get on the phone to America and say: Mr XXXX . . . you’re a multi- millionaire. You buy a hundred grand’s worth off me a year. Do me a favour would you. Just put — yeah. Exactly.”
He claimed eBay would never follow up a complaint against him for shill bidding because he generated about £15,000 a month in commission for the company. “Are they going to ban somebody who’s making them the best part of 15 grand a month? No,” he said.
After being told that he had been talking to an undercover reporter, Paraskevaides denied that he had ever shill bidded on eBay and claimed he was talking about clients who sometimes bid on expensive items if they wished to protect the price.

However The Sunday Times discovered businesses that have been bidding on their own items. One leading dealer from London admitted last week that that he had shill bidded in the past.
A spokesman for eBay said he expected that the company would now launch an investigation into Paraskevaides. Anyone caught shill bidding risks a permanent ban.
The spokesman added: “The change to the way bidder IDs are shown has already resulted in a safer environment for users.”

E-Bay Class Action Lawsuit

I thought readers might be interested in this if you were not aware of it, or if you wanted to opt out before your deadline expires.

SUPERIOR COURT OF THE STATE OF CALIFORNIACOUNTY OF SANTA CLARA JOHN ROCKERS, MARK RAWLING and BRIAN MORK , On Behalf of Themselves and for the Benefit of All with the Common or General Interest, Any Persons Injured, and All Others Similarly Situated, Plaintiff, vs. EBAY, INC., et al.,

Defendants. ) ) ) ) ) ) ) ) ) )

Case No. 1:05-CV-035930 CLASS ACTION NOTICE OF SETTLEMENT OF CLASS ACTION DATE ACTION FILED: 02/17/05THIS IS A LEGAL NOTICE. YOUR RIGHTS MAY BE AFFECTED.PLEASE READ IT CAREFULLY.


To: All eBay users from February 16, 2001 to the present. If youclaimto have been harmed by eBay raising the eBay bidder's existing bidwhere nohigher competing bid had been made and where raising the bid was notnecessary to meet a reserve minimum you are a Member of the "Class" and your rights may be affected by the proposed class action settlement of a law suit alleging that eBay would automatically increase in certain circumstances an existing bid where no competing bid had been made and where it was not necessary to meet a reserve minimum. eBay denies any and all of the contentions and allegations of wrong doing relating to eBay's in creasing an existing bid where no competing bid had been made and where it was not necessary to meet a reserve minimum, and denies that the Members of the Class have suffered any damage. This Notice summarizes the terms of the settlement, and explains your rights and options under the settlement.

I. THE LAWSUIT

On February 17, 2005, a complaint was filed by plaintiff Glenn Block in the Superior Court of the State of California County of Santa Clara( the"Court") as a class action 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 (the "Action"). On April 17, 2006, an AmendedComplaint which, among other things, substituted Plaintiffs John Rockers,Mark Rawling and Brian Mork for the original plaintiff was filed in theCourt. The caption of the Action is Rockers v. eBay, Inc., et al., CaseNo.1:05-CV-035930.

II. THE SETTLEMENT TERMS The parties participated in mediation with the Honorable Read Ambler(Ret.) in an effort to resolve the Action. As a result of the mediation and in order to settle the allegations in the Action, eBay has agreed to cease the conduct alleged by making the following "curative disclosure" that is relative to the misrepresentations claimed by
Plaintiffs: In response to a system prompt, if a high bidder attempts to raise his maximum bid when such bidder is then between bid increments, eBay shall first disclose to such bidder the exact amount of any resulting bid increase that would otherwise occur by virtue of the bidder raising the maximum bid.By way of illustration only and using the facts set forth in paragraph 23 of the Complaint, upon raising the maximum bid once plaintiff had reached his existing bid maximum of $111.00, eBay would disclose whether raising the maximum bid level would result in the $111.00 bid being raised to the next bid increment over the last competitive bid of $110.00 and, if so,specify the exact amount to which the bid would be raised - that is, $112.50.

In addition, eBay has agreed to pay the sum of $2.1 million("Settlement Fund"). The Settlement Fund will be distributed to one or more federally tax exempt charities chosen by Plaintiffs' Counsel and approved by the Court. None of the charities selected by Plaintiffs' Counsel and approved by the Court shall be directly or indirectly affiliated or associated with Plaintiffs or their counsel. Based on information provided by eBay to Plaintiffs' Counsel, the $2.1 million is estimated to be approximately 50% of the claimed damages and all other economic harm allegedly incurred by Members of the Class. Distribution of the Settlement Fund to charitable organizations is appropriate because any attempt to distribute the Settlement Fund to individual Members of the Class -whos eaverage recovery would be less than $1.00 - would result in administrative costs that would consume any settlement proceeds. eBay has also agreed to separately pay Plaintiffs' Counsel$800,000for past and anticipated future attorneys' fees and expenses regarding the Action, subject to Court approval ("Attorney Fees"). This amount was negotiated and agreed to after the substantive provisions of the settlement were reached and after the memorandum setting forth the material terms of the settlement was executed. Plaintiffs' Counsel, subject to Court approval,intend to pay up to $104,300.00 and $150,000.00 to Glenn Block (orGlennBlock, P.C.) and Daniel Block (or DSB Consulting, Inc.), respectively,for their expert services in this Action from the Attorney Fees. Glenn Block was the original plaintiff in the Action and provided technical assistance to Plaintiffs' Counsel regarding eBay's auction practices, the allegations in the Action, the calculation of damages and economic harm, and due diligence.Daniel Block is Glenn Block's son and provided computer, programming and data mining expertise that was otherwise unavailable to Plaintiffs in a timely and efficient manner. Their expertise was unique and necessary for the successful prosecution of the Action.

eBay shall also separately pay, subject to Court approval, the three Plaintiffs named in the Amended Complaint, $1,000 to reimburse them fortheir time, costs and efforts in representing the Class. III. CONSEQUENCES OF THE SETTLEMENT If the Court approves the settlement, a judgment will be entered dismissing the lawsuit with prejudice against eBay and all of its past and present officers, directors, shareholders, employees, insures, agents,representatives, partners, joint-ventures, parents, subsidiaries,affiliates, and attorneys (the "Released Persons"). This means that Members of the Class will be barred from bringing their own lawsuit against any of the Released Persons relating to eBay's alleged practice of raising an eBay bidder's existing bid where no higher competing bid had been made, and where raising the bid was not necessary to meet a reserve minimum. If you do not want to be barred from bring your own lawsuit on such claims, you must validly and timely request exclusion from the Class, as set forth below.

IV. YOUR OPTIONS If you are a Class Member, you have the following options: (A) Participate in the settlement. To participate in the settlement, you do not need to do anything. If the Court approves the settlement and the judgment is not successfully appealed, the terms of the settlement will be implemented. (B) Request exclusion from the Class and settlement. If you wish to be excluded from the Class and the settlement, you must send a written request for exclusion by regular or express mail, so that it is postmarked no later than January 30, 2007. Your exclusion request must include (1)yourname, address, and telephone number; and (2) a statement that you wishto be excluded from the Class and settlement in Rockers v. eBay, Inc., etal.,Case No. 1:05-CV-035930. If you submit a valid and timely exclusion request,you will not participate in the settlement. You will not be bound by the judgment dismissing the lawsuit with prejudice as to Released Persons,and your claims will not be released. (C) Comment on the settlement. If you remain in the Class,you may comment in support of or in opposition to the settlement. To do so,you must, no later than January 30, 2007, file your comment or objectionwiththe Court and send copies by regular or express mail to Plaintiffs'Counselat the addresses below: The Court: Clerk of the Court SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF SANTA CLARA Civil Division 191 North First Street San Jose, CA 95113 Plaintiffs' Counsel: Jeffrey D. Light LERACH COUGHLIN STOIA GELLER RUDMAN & ROBBINS LLP 655 West Broadway, Suite 1900 San Diego, CA 92101-3301 Your written comment or objection must include (1) your name,address,and telephone number; (2) information sufficient to establish your membership in the Class; (3) a statement of your views; (4) any supporting documentation you wish to submit; and (5) a reference to Rockers v.eBay,Inc., et al., Case No. 1:05-CV-035930. If you wish to appear and present your objection orally at the fairness hearing described in Part V below,your written objection must contain a notice that you intend to appear and be heard, a statement of the positions you intend to present at the hearing,and any supporting arguments. You may, but need not, appear in the lawsuit through your own attorney. If you do so, you will be responsible for your own attorney's fees and expenses.

V. FAIRNESS HEARING A hearing will be held on February 13, 2007, at 9:00 a.m. before the Honorable Jack Komar, Superior Court Judge, in Department 17C at theSanta Clara Superior Old Courthouse, 161 North First Street, San Jose, California 95113. The purpose of the hearing will be to determine (a) whether the proposed settlement including the attorneys' fees and expenses and service awards that eBay has separately agreed to pay should be approved as fair,reasonable and adequate and should be granted; and (b) whether the Action and the claims of the Members of the Class should be dismissed with prejudice pursuant to the settlement. This hearing may be rescheduled without further notice to the Class. You may attend the hearing if you wish,but are not required to do so to participate in the settlement.

VI. HOW TO GET MORE INFORMATION You can get more information by contacting Plaintiffs' Counsel at the address listed in Part IV (C). Complete copies of the settlement agreement and all other pleadings and papers filed in the lawsuit are available for inspection and copying, during regular business hours, at the Office oftheClerk of the Court, Superior Court of the State of California, County of Santa Clara, Civil Division, 161 North First Street, San Jose, CA 95113.

PLEASE DO NOT CONTACT THE COURT REGARDING THIS NOTICE. DATED: November 8, 2006 BY ORDER OF THE COURT SUPERIOR COURT OF THE STATE OF CALIFORNIA, COUNTY OF SANTA CLARA

E-Bay & Paypal at War With Google

I thought readers might be interested in this if you sell coins or for that matter anything on E-Bay you might find this interesting.

Sellers in the Middle of eBay - Google Conflict

By Ina SteinerAuctionBytes.com January 22, 2007

eBay has long denied it competes with Google. It was only 1 year ago that CEO Meg Whitman was quoted in theFinancial Times newspaper saying she believed Google,Yahoo, eBay and Amazon would focus on their core activities rather than compete with each other head-on. In support of her prediction, Whitman said eBay specialized in ecommerce, payment and voice communication, while "Google stands for search." Since that interview, Google launched its Checkout payment processing system and recently said it has ambitious plans for its Google Base offering(http://googlebase.blogspot.com/2007/01/big-plans-for-2007.html).

eBay meanwhile banned its sellers from using GoogleCheckout, and earlier this month, eBay said it would only protect buyers in PayPal-funded transactions. On Wednesday, eBay said it would begin requiring newsellers to accept PayPal or a merchant credit card in order to list items on the US and Canadian sites. The same day, Google started using its prime search page to advertise a special promotion offering buyers $10 to spend when they used Google Checkout.

On Thursday, gossip-blog Valleywag said the Google promotion signaled the end of a "cease-fire" between the companies. Valleywag said a former executive at eBay told it the two companies had "agreed tacitly in 2003 to stay out of each other's turf," and that as recently as last August, the two companies were still trying to avoid conflict (http://valleywag.com/tech/behind-the-news/google-breaks-ceasefire-with-ebay-229800.php).Red Herring magazine concurred on Friday, calling theGoogle - eBay war "official" (http://www.redherring.com/Article.aspx?a=20838&hed=Google%2c+eBay+Go+to+War).eBay said its decision to institute its Safe Paymentspolicy in October 2005, now called the AcceptedPayment policy, was based on safety concerns and inputfrom the Community. But eBay PowerSellers are getting itchy for eBay tolet them process payments through Google Checkout.

While eBay's payment service PayPal can cost 2.9% plus per-transaction fees, Google made Checkout free through the end of 2007. Those dollars add up, and theInternet Merchants Association (IMA) - a group of 200top eBay sellers - started an online petition to demand that eBay leaders remove the ban on GoogleCheckout (http://www.petitiononline.com/ebayban/petition.html).eBay spokesperson Hani Durzy told Red Herring therewas little if any merchant demand for Google Checkout. eBay is increasingly finding itself bumping into Google folks at eBay seller events.

The next such meeting will take place at the IMA conference next month, where eBay will present a session called "Newin 2007," while Google will spend 3 hours explaining its AdWords, Google Checkout, Google Base and Froogle programs. Sellers can only hope they will be the beneficiaries of battles between the behemoths.

Link to Financial Times interview with Meg Whitman: http://www.ft.com/cms/s/ae2efcb0-9847-11da-816b-0000779e2340.html

Link to story:http://www.auctionbytes.com/cab/abn/y07/m01/i22/s01

I hope you enjoyed the article

Happy Holidays

I Just wanted to wish everyone Happy Holidays. I have not been able to do much Blogging, as I have been out of town and Life has been very hectic. I hope to be able to write more often in the future.

McAfee, Symantec and vested interests

I found this to be an interesting article, as I do find it strange they want to hide the kernel so to speak and I'm really not sure why this guy supports that. It's my opinion that having something open makes it more secure, because more people get a chance to attack it and find ways to fix it.

Is it just me or does anyone see the irony in that Microsoft has had years of lax security that helped create the industry's that help protect those breaches, now late into the game Microsoft comes out with it's Onecare product line. So you have a company that is selling something that is flawed, and now are selling you the product to fix those flaws, anyone see a conflict of interest there?

http://blogs.zdnet.com/carroll/?p=1611&tag=nl.e622

McAfee, Symantec and vested interests Posted by John Carroll @ 9:25 am
Digg This!

Vested interests often force governments to continue with policies that are counter-productive, if not downright negative. Examples aren't hard to find. Even if congress had the will to confront the vested interests that protect all the various deductions in the US tax code and create something that is clean and simple, truckloads of lobbying dollars would be spent by tax preparation companies to block the changes. Mandatory minimum sentencing laws are strongly supported by the private companies that build and maintain many of America's prisons, even as those laws swell America's prison population to levels not typically found in nominally "free" nations. Likewise, the DEA and companies that support them can be expected to fight against any attempts to stop America's futile war on drugs, a war that sends Bolivian leaders into the arms of Hugo Chavez, funds both sides in Colombia's civil war (think Al Capone times 1 million) and provides a steady stream of cash to Afghani insurgents through sale of poppies - the raw material used in heroin.

Though Symantec and McAfee lobbying the EC on behalf of their ability to hook the Windows kernel doesn't wreak as much havoc as these other vested interests, as an instance of business interests using government to warp policy in selfish directions, it falls into the same category. This smells of companies trying to preserve the flaws in a product upon which they have built their businesses. Really, does anyone in these forums WANT third parties to have access to the Windows kernel? The fact that no one does is why McAfee/Symantec aren't trying to defend the inherent value of such access and opt instead for the "futility" argument. The core of the argument is that PatchGuard won't work and that hackers will find workarounds that McAfee will have to ride in and fix for Microsoft. Essentially, there's no point in Microsoft trying to protect the kernel because they will never make it bulletproof, anyway. Following that reasoning to its logical conclusion, Microsoft shouldn't bother to alter its software development processes so as to emphasize secure coding techniques, given that perfection is impossible, and from a business standpoint, deprives Symantec and McAfee of the opportunity to protect consumers from the consequences of those flaws. As noted, I'm not seeing many in ZDNet Talkbacks rushing to defend McAfee and Symantec in their quest, probably because they DON'T WANT Symantec and McAfee to have that kind of access.

If McAfee and Symantec want to do something useful, they should build products that help to to enforce the kernel protections represented by PatchGuard. What they should NOT be doing is trying to prevent Microsoft from locking down the kernel in the first place. People really should read this blog post by Stephen Toulouse, a program manager in Microsoft's Security Technology unit, as it clarifies considerably the situation as it pertains to kernel hooking past, present and future. http://www.stepto.com/default/log/displaylog1.aspx?ID=258

Some useful excerpts…

Regarding Microsoft's past encouragement of kernel hooks: Wrong. For the implementation of the 32 bit kernel of Windows, there existed undocumented and unsupported system hooks into the kernel. Their use was frowned upon, even inside Microsoft. It's simply not a safe practice to utilize these interfaces into the kernel. Regarding the termination of support for kernel hooks being something that is "new:" Wrong.

Kernel Patch Protection was implemented almost 2 years ago in Windows XP x64 edition and Windows Server 2003 x64 edition. Regarding supposed "insecurity" resulting from a ban on kernel hooks: What security vendors are misrepresenting, is that only through unrestricted access to modify the kernel at the highest level of privilege can they protect you.Of course, the referenced blog predates Microsoft's decision to enable in some as of yet undetermined fashion a means by which to enable kernel hooking "in a secure fashion."

On that note, consider the perils of such an approach as explained at the end of Mr. Toulouse's blog. First, you grant one, pretty soon you have to grant thousands. That's how many people are out there using these undocumented, unsupported interfaces into the kernel.

Second, the more exceptions you grant, the more you dilute the protection. Attackers will simply morph their attacks to try and mimic the "safelist" to get an exception – this may be as simple as malicious software “bundling” third party software in order to disable the protection.

Third, because the OS was still designed to be run with the unmodified kernel, you still have the problem of code running at highest possible privilege crashing the system or causing performance problems.

Fourth, by granting an exception list you introduce a huge performance problem into the kernel, as you force it to check a safelist with every single operation.

Fifth, how would the logistics for adding and removing exceptions work? Would it only be done in software updates? Service Packs? Would someone sue because we weren't fast enough implementing them into a safelist?

That last issue is particularly worrisome for Microsoft, and constitutes the problem with selectively allowing people to have access to the kernel. If McAfee and Symantec get access, you can expect most security companies to want comparable access, and once that happens, the question becomes: how big do you have to be to have access? Pandora's box, truly.

Like prison construction companies encouraging policies that lock up as many people as possible (let's not call them prisoners; let's call them "customers"), McAfee and Symantec are trying to encourage an architecture that "needs" the fixes of a McAfee and Symantec. In so doing, they show how self-interest and government controls over software design collide to create "solutions" that have little to do with benefitting consumers.