Is it illegal to shill?

humanji

This came up in this thread in the games forum. So the situation is this:

A guy puts up an item on eBay.
Joe Public comes along and bids on the item.
A friend of the original poster bids on the item to boost the price with no intention of buying it.

And the result is that Joe Public ends up paying an inflated price that is fixed by the poster.

So is it actually illegal to do this? I know it's frowned on and most auction sites will ban someone for doing it. And to reinforce a law like that would take a lot of effort that I can't imagine many people willing to put into it.

The_Minister

From Wikipedia:

In an English auction a dummy bid is a bid made by a dummy bidder acting in collusion with the auctioneer or vendor, designed to deceive genuine bidders into paying more. In a First price auction a dummy bid is an unfavourable bid designed so as not to become the winning bid. (The bidder does not want to win this auction, but he wants to make sure that he will be invited to the next auction).

In South Australia a Dummy bid (shill, schill) is a criminal offense but a Vendor bid or a Co-owner bid below the Reservation price is permitted, if clearly declared as such by the auctioneer. These are all official legal terms in Australia, but may have other meanings elsewhere. A Co-owner is one of two or several owners (who disagree among themselves).

In Sweden and many other countries there are no legal restrictions, but it will severely hurt the reputation of an auction house that knowingly permits any other bids except genuine bids. If the reserve is not reached this should be clearly declared.

So it depends on the country

johnnyskeleton

It's essentially fraud or making a gain or causing a loss by deception (s.6 Criminal Justice (Theft and Fraud Offences) Act, 2001). However, it would be difficult to prove, so it's best not to go around accusing people of committing an offence if they do such a thing. Instead, report it to the police.

I understood that shilling as such was simply pretending to be interested in buying something to induce someone else to buy it, rather than as you describe above in the auction scenario. As such it probably wouldn't be an offence as people are perfectly free to boast about the quality of their friends' merchandise.

humanji

Cheers