More on Windsor Auctions' Lawsuit Against eBay

This article is a continuation of my piece from yesterday regarding eBay (EBAY) lawsuits.

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Windsor Auctions' lawsuit against eBay alleges that a competitor within the jewelry category (on the eBay Live Auction platform), utilizes the auction end time duration tool to batch upload listings into eBay Live, thus gaining an unfair competitive edge by way flowing listings through eBay core on an hourly basis. One reader likened the use of the auction end time duration tool to that of the auction extender tool, which allowed regular eBay users the ability to extend their auctions if their listing received no bids. The developer of the auction extender tool was Ethical Technologies, which is no longer in business. As there’s no one to speak to concerning the initial use of this tool on eBay (and its intermittent history on eBay), we can reconstruct the events leading up to its ultimate demise.

As one reader has stated:

So let me get this right...there is a tool available to eBay Live Auction platform sellers that lets them specify/adjust listing end/time duration to allow them maximum exposure for a listing/set of listings. Sounds an awful lot like the auction extender tool that eBay prevented core site sellers from using in January of 07 after much internal debate. The tool allowed for continued auction duration extensions that bumped the duration out at the last moment as it was moving up in the 'ending soonest', thus giving a listing multiple 'ending soonest' exposures before it ultimately ended. The tool improved sales (and reduced fees) for many sellers who used it, but eBay implemented policy in Jan 07 banning use of extender tools (see AuctionBytes.com for multiple stories).

Their reasoning? It provided a bad buyer experience, and was a form of search manipulation. The tool on the Live Auction platform seems to offer the same seller advantages, the same poor buyer experience, and the same eBay policy violation.

In August 2005, eBay spokesperson Hani Durzy stated:

We do let people manually revise their listings, but it’s meant to be done on a rare occasion, like if there is a blackout in part of the country and the seller feels they didn’t reach their full audience.

Durzy further stated:

We don't want this tool to be out there. It changes what the eBay buyer experience is. If buyers have a worse experience, they don't come back." He said eBay is in discussions with Ethical and would be revising the API usage policies that developers are required to follow.

(Source: AuctionBytes August 9, 2005).

Durzy closes the interview with the following statement:

They (developers) can tweak the eBay platform in ways that we couldn't have imagined.

That is a good thing and eBay encourages them, he said, but eBay "must do what is right for the overall marketplace." In late September 2005, Durzy announces that eBay will allow Ethical Technologies to offer its sell-through tool to eBay sellers. In January 2007, eBay changes its circumventing fees policy, which then prohibits the use the auction extender tool for everyone. Ethical Technologies closes it doors – end of story or, is it? Durzy clearly uses phrases such as “search manipulation”, “bad buyer experience” and “eBay policy violation”.

One can draw their own conclusions as to the value of front page placement on eBay core, let alone, flooding core hourly. eBay Live Auctions charges $1500.00 per catalog and a Live Auction seller may upload up to 10,000 lots into the system. eBay Live charges a 5% Final Value Fee on every lot sold through its system (as per eBayLiveAuctions.com). A Live Auction seller pays 0.15 per listing (if the seller lists the maximum number of lots allowed). Non Live Auction eBay sellers can compare their average listing fees to arrive at their own conclusion, as to any disparity in listing fees between regular eBay listings and those paid by eBay Live Auction sellers.

In the case of the auction extender tool, all regular eBay sellers were afforded a “known” opportunity to extend their eBay listings beyond their initial end time. In the case of Live Auction sellers, one seller (maybe more) within the jewelry category (operating multiple auctions, seven days per week, twelve hours per day) flooded eBay core on an hourly basis. One hour before a live auction begins, the auction duration plus, one hour is added to the end time of each lot. Before a live auction begins, the end time is reflected by the auction start time.

The inaccuracy of the end time may lead to bidders missing an opportunity to bid on a lot of interest. Some Live Auction sellers have resorted to placing disclosures within their listings advising potential bidders that the end times on their lots are inaccurate. In order to combat the confusion, live auction sellers may also opt to disclose how many pieces per hour they may bring up to auction on average.

While such disclosures may assist potential bidders in gauging when a specific lot will come up at auction, situations may arise where the auction moves slower or faster than the auction seller originally anticipated. If the auction duration tool has the capability to offer a more accurate end time, then it stands to reason that such a tool is extremely valuable to live auction sellers.

However, its use by all live auction sellers could clutter core in many popular categories. As of this writing (Tuesday evening, 7:17 PST), there are seventy ruby rings offered by one live auction seller on pages one, two three and four of eBay core. This search was conducted using “best match” and not “time ending soonest”. It would appear as though “best match” may actually enhance “timed” live auction listings.

Disclosure: none