eBay Live Auction Class Action…

In order to understand the magnitude of claims against eBay and its platform, eBay Live Auctions, one has to look no further than the Michele Mazur and Sarah Bates Class Action against eBay, Inc., Hot Jewelry Auctions d/b/a Jewelry Overstock Auctions, Neiman’s Jewelry and GoAntiques.com. The complaint alleges shill bidding and possible gross negligence, misconduct, apparent coordination and actual fraud. The complaint (for all of its 93 pages) focuses on the sale of junk jewelry and the reaping of “fat profits” (upwards to tens of millions of dollars) from unsuspecting Class Members. 

As many eBay Live Auctions do NOT actually have an Auction Floor and are virtual auctions, the complaint alleges a massive shill bidding operation. In other words, the complaint alleges no one exists on an Auction House Floor and therefore the bids are created with the click of a mouse via (in the case of Jewelry-Overstock-Auctions) a “Click Room”. A review of the eBay Live Auctions platform shows that ALL bids are generated as a Floor Bid or Auction House Floor bid. A review of “closed lots” displays that every item on eBay Live Auctions has been sold to either an Internet Bidder or the Auction House Floor Bidder.

One possible seller defendant defense would be that eBay Live Auctions only offered ONE button which was entitled (and relayed to the end-user) as “Auction House Floor”. As such, no other option existed for the seller defendants.

One area in which Paramount/ Jewelry-Overstock-Auctions may have overstepped its bounds is by offering a “Host our Live Auctions” affiliate program to eBay users via its thousands upon thousands of eBay Live Auction listings over an extended period of time. The Affiliate Program offered users the option to become “The Auctioneer at the Party”, which one would think is against eBay policy. Think Tupperware party, however, replace the Tupperware with jewelry and become your own Live Auctioneer with a commission bonus for each and every sale . Add the ability to gain high visibility in the forefront of eBay core, with the use of eBay’s Live Auction “tool/option” located on the Catalog Management Set-Up page and someone down the line (at eBay) may have an awful lot of explaining to do.  

Does the Mazur/Bates case have any relation to the claims asserted by Windsor, Jewelry Auctions and Universal Live?  Windsor complains to eBay concerning Paramount/Jewelry Overstock Auctions high visibility within eBay core. eBay does nothing to stop or hinder such priority placement. However, it’s not just Paramount/Jewelry Overstock who’s using the option/tool it’s also Neiman’s Jewelry who utilizes the option/tool to gain high visibility. Interesting that the two eBay Live Auction sellers of jewelry are the ONLY ones to have unfettered use of the option/tool.

The Mazur/Bates complaint goes on to allege (upon information and belief) that the following eBay individuals were specifically told that the Seller-Defendants were engaged in shill bidding:

Matt Ledwith (no longer employed by eBay)
Quincy Carroll
Andrea Weaver
Dean B. Gonzalez
Crystal Graham (no longer employed at eBay)
Meg Whitman (no longer employer at eBay)
Bill Cobb
Adam Sand (eBay in-house counsel)

NOTE: In a bizarre twist of fate, it now appears a related company of Windsor Auctions has a claim against one of the seller defendants in the Mazur/Bates Shill Bidding eBay Class Action lawsuit, as well as its claim against eBay, Inc. and eBay Live Auctions for Unfair Competition.

All three Seller Defendants (along with eBay) answered their complaints denying the allegations.The question remains, as to if the the seller defendants will break-away from eBay and use the shortcomings of the eBay Live Auction platform within their own defense.   

To review the Mazur/Bates complaint please Click Here. Be forewarned that it is 93 pages, however, offers a great deal of insight into the claims against the Seller Defendants and the eBay Live Auction platform.