Why is the “eBafia Don” destroying eBay?

[PhilipCohen]

http://www.auctionbytes.com/forum/phpBB/viewtopic.php?t=24411

Why is the “eBafia Don” destroying eBay?

4 November 2009; last revised 20 November 2009


Dilbert Copyright 2009 Scott Adams Inc. (That’s the Ho with his head in the toilet, looking for his lost performance bonuses.)

“Noise” Donahoe (aka the Don, the Ho, the Ho-Ho-Ho, …) is not really trying to destroy eBay, in his peculiar way, he’s actually trying to save eBay. Well, maybe that’s not quite right either; what he is really trying to do is find his lost performance bonuses—a rather hopeless cause, I would have thought. If he keeps looking, maybe he can find a small “golden parachute” in the petty cash tin—hopefully, before he completes the total destruction of the eBay marketplace; regardless, he’s not going to find any answers to eBay’s problems with his head stuck down that toilet …

The Don and his troupe of executive sycophants, apart from appearing to be serial dissemblers, are just smart enough to know that eBay is little more than a “house of cards” that could one day be found by a court in some land to be the criminal organisation that I, and many others, believe it to be, and as a result of such finding the “eBay House of Cards” could likely then be blown down by some governmental consumer affairs regulator—if there is one out there that is actually interested in doing the job it is charged with doing—protecting we simple peasants from such unscrupulous commercial enterprises.

I say “criminal organisation” because it can be demonstrated that eBay knowingly facilitates—indeed aids and abets, before and after the fact—the defrauding of consumers by the many unscrupulous shill-bidding professional sellers that now infest eBay, and in so doing eBay profits from the higher “final valuation fees” that result from such criminal activities.

As a reinforcement of that contention it can also be demonstrated that—contrary to eBay’s claims—eBay apparently has no “proactive” nor truly “sophisticated” tools for the detection of such criminal activity. Any such activity not detected and reported by users themselves appears to go undetected, period. The only actions taken by eBay appear to be re-actions to the reports of alert users. Users have to do the job eBay claims, falsely, to be doing, but with both hands tied behind their backs by eBay.

That it can be demonstrated that eBay—contrary to their claims—has no effective proactive tools for the detection of likely shill bidding, would appear to be a clear breach by eBay of the contract that eBay invites users, who buy on eBay, to enter into with them. Indeed, most of the “security” that eBay claims to provide buyers appears to be little more than “smoke and mirrors”.

When users report suspected shill bidding activity, eBay may well give the criminals a “slap on the wrist”, but that is effectively all they will do, and an indication that such a slap on the wrist may have been received is a seller’s sudden conversion to the use of a fixed price selling format for all their listings, albeit for only a nominal period of time. In effect any penalty is not because the seller was shill bidding but for being naïve enough to be caught shill bidding (after all, that’s what the “private listing” auction format is for, to totally obscure such criminal activity). But those buyers that have been defrauded get no consideration from eBay with respect to the recovery of the money of which they have been defrauded.

eBay also deceives consumers by denying that “shill bidding” fraud is even a problem on eBay auctions and indeed they compound that deceit by claiming that their auction platform is “as secure as any such platform can be”. It is clearly not secure, never has been secure, and it is nowhere near as secure as it could be—and they cannot but know it; and eBay should not be deceiving consumers with such patently and demonstrably false claims.

The probability is that eBay cannot afford to proactively and effectively police shill bidding on its auctions as any such effective action would devastate the many unscrupulous professional sellers from whom eBay receives a great deal of its revenue.

The Don will claim that the majority of items listed on eBay are now listed in a “fixed price” format, and that may well be true; but have a look at the “Completed listings” list of any professional seller (eg, try the eBay-touted selling success story, BeckerTime, an eBay “Top Rated Seller”) and you will most likely see that the islets of green (successful sales) in the oceans of “blood” (unsold items) are mainly auctions “baited” with a very low starting price relative to the market value of the goods.

Let’s be realistic. In such circumstances, the great majority of those professional sellers will have a mechanism for obtaining the price that they want for their goods and that mechanism will most likely be multiple shill bidders bidding on those auctions. Some auctions will have more shills bidding that genuine bidders; some will have only shill bidders bidding: the sellers desperately trying to beat up some interest in the item. Regardless, anyone who thinks that such professional sellers are going to let their stuff go for any less than they (probably quite reasonably) want for it and that the buyer is therefore likely to get a bargain, is living in dreamland.

If the Don truly believes that auctions are not what eBay is all about for most users, then let him mandate the fixed price format across the board and let us see just how much sooner eBay hits that brick wall that he has been relentlessly driving so fast towards. Having said that, mandated “fixed price” would at least rid eBay of all the unscrupulous professional sellers who can’t get the price they want for their stuff via the auction format without a $0.01 start and shill bidding. But then, eBay would no longer be eBay, either.

The “Ho-Ho-Ho” is trying to downplay the importance of auctions because he well knows that eBay’s auction system is so open to abuse by unscrupulous sellers that long ago some competent authority should have served notice on eBay to cease the conducting of such “clunky” auctions or (at least) supply users with the transparency that would give legitimate buyers the opportunity of better protecting themselves from the many unscrupulous shill-bidding professional sellers laying in wait for them on eBay.

And what has the Don done? Contrary to all ethical considerations, he has done just the opposite. Rather than make any attempt at fixing the auction system or making the process more transparent, or developing a “shill score” mechanism (or even talking to someone about such a mechanism) to protect legitimate buyers, the Don has introduced a system of masked bidding aliases that further lessen the transparency of the auction bidding process for no other material purpose than to further obscure such criminal activity.

No more does the naive cheat need to resort to eBay’s “classic shill bidders’ tool”, the patently devious, seller-selected, “private listing” auction format (but many naïve shill-bidding sellers still do use it), a mechanism that serves no other material purpose than as a hide for shill bidders. (Experienced eBayers know to never enter into a bidding contest on such auctions for they know that those sellers who use “private listing” auctions are most probably doing so to hide their own shill bidding.)

Buyers may also eventually notice that most of the eBay rules and conditions of use that users contract to are nominal only except where they have any effect on eBay and, even then, I suspect that eBay is currently allowing unscrupulous sellers great latitude with the “buyer did not pay” excuse for the avoidance of FVFs on pseudo sales. (Could you believe that shill bidders that unintentionally win auctions never pay!)

Ninety-nine percent of eBay’s problems are of eBay’s own making. Such absurdities as a fee structure that encourages $0.01 starts and all the deviousness that invariably will accompany such low-value starts whereby most professional sellers have no intention of letting their items go for less than they want for them, etc; the list simply goes on and on and on …

On the UK site the form of bidder masking it is even less transparent than in the rest of the eBay world. The absolute anonymity of the masked alias used there (“Bidder x”) gives sophisticated shill bidders free reign with absolutely no fear of detection by users; the UK shill-bidding seller no longer needs to “brand” himself as a probable cheat by using the “private listing” auction format. Is it any wonder then that, relatively speaking, buyers are staying away from the UK site.

So, rather than attempt to do anything about the broken and very much abused auction system, the Ho-Ho-Ho apparently assumed that he could lessen eBay’s reliance on the auction system by trying to change eBay into something other than what eBay is (or used to be). It is becoming more and more apparent that his assumption was wrong, as the continuing reductions in staff, revenues and profits from the eBay Marketplaces periodically reaffirm.

Why is this destruction of eBay continuing? Understand one thing, the executive management and board of directors of eBay are concerned about only one thing, themselves—is it any different anywhere in the publicly listed “for profit” world? The big difference is that, having chosen the wrong course, these latter-day “Captain Queegs” are apparently intellectually incapable of recognising the error of the many bad decisions that have been made in recent years and, as a consequence, the eBay marketplace continues on its journey down the sewer, no doubt soon to reach the even rougher waters of the big ocean—and that is a real shame.

I always refer to eBay users as “users”, for to refer to them as “members”, as eBay does, is to imply that the organisation is run for some benefit of those “members”—it is not: No action taken (or not taken) by eBay management has anything to do with benefiting or protecting eBay users (buyers or sellers); eBay’s every action (or lack thereof) is purposed solely towards benefitting eBay—and by whatever means—undoubtedly more to do with the recovery of those “lost” executive performance bonuses than with any direct consideration for shareholders—and if at any time there appears to be some benefit to eBay “users”, that will be purely coincidental.

Then there is PayPal. The eBafia Don will talk about the possibility of disposing of PayPal only because he is also just smart enough to know that PayPal is as “clunky” as the eBay auction system is, that PayPal is a system more suited to a banking operation and that if the banks and their credit card company partners ever get off their butts and introduce a like terminal/card-less payments system (which they will undoubtedly implement effectively), the banks will dispose of PayPal—outside of the ever-shrinking eBay marketplace—in about five minutes flat.

Frankly, the people making the decisions at eBay have not got a clue and may as well be headless chickens—maybe headless turkeys would be more appropriate in the US context—which raises the question, how can this arrogant, strutting turkey, “Noise” Donahoe, possibly survive another Christmas? If he does, then eBay is clearly doomed to continue its slow slide into the abyss.

eBay should be an honest broker between buyer and seller, but they are not. In the final analysis, the only difference between eBay and an unscrupulous traditional auctioneer is that eBay is knowingly facilitating the defrauding of legitimate buyers on a world-wide scale. Buyers on eBay should have no doubt that this “eBafia” is a deceptive, devious, totally unscrupulous—indeed criminal—organisation, albeit presently a failing one, that is effectively, and knowingly, aiding and abetting unscrupulous sellers to defraud genuine buyers and, if you are interested, the many facts that support this conclusion can be found in the below-linked sources.

PS: Maybe Meg is not so dumb; she’s passed the poisoned chalice to the Don and has taken off running—with her share of the loot. The real test of her intelligence will be whether or not she has also dumped (if not contracted to do otherwise) her eBay stock for something more capital secure …

Further reading on the very real problem of shill-bidding fraud on eBay auctions:

Shill Bidding on eBay: a Case Study
My first study, of naïve shill bidding on eBay auctions, at:
http://www.auctionbytes.com/forum/phpBB/viewtopic.php?t=24033

Shill Bidding on eBay: Case Study #2
This time based upon a spreadsheet analysis of multiple auctions from some “professional” sellers from the US and Australia. Needless to say the analysis appears to demonstrate, once again, that, contrary to eBay’s claims, sophisticated shill bidding by many “professional” sellers is rampant on eBay auctions. The full comment and spreadsheet download links at:
http://www.auctionbytes.com/forum/phpBB/viewtopic.php?t=24296

Shill Bidding on eBay: A Study of Two eBay-Touted Power Sellers
For all the eBay “buyers” who are still trying to find a bargain on eBay and are (hopefully) agile enough to avoid all the shill-bidding professional sellers that now infest eBay, eBay recently touted two Diamond/Titanium PowerSellers as major success stories of selling on eBay. An analysis of the bidding patterns on these two sellers’ auctions shows that they both have very many regular “customers”—many of whom never win an auction—I wonder why? The details at:
http://www.auctionbytes.com/forum/phpBB/viewtopic.php?p=6502763

eBay introduces absolute anonymity for (shill) bidders
One of my earlier ramblings on the introduction of “hidden bidders”, at:
http://www.auctionbytes.com/forum/phpBB/viewtopic.php?t=23227

Yet another example of the negligence/deviousness of eBay
An exposure by eBuster.co.uk of those sellers who appear to be trafficking in feedback—a matter that eBay cannot but be aware of, but does nothing about. Even more interesting than the actual list of sellers are the sellers’ linked Feedback Profiles, in which are listed the User IDs that are buying such feedback. Fortunately, eBay has not (yet) given such “buyers” the opportunity to hide behind a “masked alias” so one can easily check to see if these buyers are professional sellers and what sort of activity is taking place on their auctions, or if there is no selling activity then the IDs are most probably of the revolving line of 10-20 shill-bidding IDs that every unscrupulous professional seller now has up his sleeve. You may also note that, naturally, much of this dealing in feedback is done via “private listings,” supposedly to protect the buyer, which would appear to be pointless as, although the resulting feedback does not disclose what was bought or the value thereof, the buyer is clearly identified as dealing with such a feedback trader. (Surely, the transparency of such unscrupulous activity cannot be to eBay’s liking?)
http://www.ebuster.co.uk/SellingFeedBack/AllSellingFeedback.aspx
_________________
Clearly, the lunatics at eBay have taken over the asylum and are bent on burning it down.
“The difference between genius and stupidity is that genius has its limits.” ~ Albert Einstein.

[kjp55]

OMG, Phillip. You're making a career out of this shill bidding story. What motivates you to care so deeply about this subject? Most people realize that ebaY is a place to make a modest part-time income but the days of ebaY glory have long passed. I doubt most people spend more than a few seconds of their day contemplating or worrying about how ebaY is 'screwing us'. What's new with that? Most of us have learned it's simply not worth the effort and have adapted, or moved on to greener pastures.

[PhilipCohen]

Hi kjp55,

Sorry, but to put it in the most simple terms, I find this company to be so blatantly unscrupulous, indeed criminal, that I simply cannot resist continuing to “poke a stick” at this evil “snake”.

You comment seems to suggest that you are prepared to accept the status quo, that eBay is knowingly aiding and abetting the defrauding of buyers by the many unscrupulous professional sellers that now infest eBay, and thereby benefitting from such fraud.

Not likely will I ever accept that, and I am a little surprised that anybody else would, by such a comment, give the slightest appearance of doing so.

Of course eBay, in the meantime, is quite effectively destroying itself; but if I can be of any benefit to them in that task in any way, then I am only to happy to be of such benefit ...

“Making a career”? Well, I am now retired and I was looking for something else constructive to do with my time—and along came “Noise” Donahoe and the introduction of masked bidding aliases ...

But, more importantly, can you point out any flaws in the general hypothesis?
_________________
Clearly, the lunatics at eBay have taken over the asylum and are bent on burning it down.
“The difference between genius and stupidity is that genius has its limits.” ~ Albert Einstein.

[kjp55]

[PhilipCohen]

Hi kjp55,

You may well be right but the most annoying thing about it all is that I used to enjoy dabbling on eBay (mainly as a buyer of collectible stuff), I too much less so of late because one has to be so on guard against the shill bidding cheats, and I find it a great disappointment that the people in control of eBay are so shortsighted about everything.

Regardless, I think that they should not be able to get away with behaviour that is ultimately criminal. The "eBafia" and its associate PayPal seem to have become the most hated organisations in the whole world. I find it hard to believe that even in "the Land of the Free" some competent authority has not yet shone a light under this rock.
_________________
Clearly, the lunatics at eBay have taken over the asylum and are bent on burning it down.
“The difference between genius and stupidity is that genius has its limits.” ~ Albert Einstein.

[Chrisgod]

Phillip, whilst I do agree to an extent that some of the ebay top echelon are not above a bit of Jiggery Pokery! I have also now had a chance to study at least one of the links you gave (http://www.ebuster.co.uk/SellingFeedBack/AllSellingFeedback.aspx) And again whilst I can agree with the statement "SOME" of the sellers are selling feedback undoubtedly I can also find several sellers who are LISTING AUCTIONS to start at 1p (I myself have been guilty of this!) But a lot of these auctions are selling at a lot greater amount than the 1p start. So where is the mileage in that?

It is a little like saying Pay Pal suck ALL the time!
_________________
It is to be observed that 'Angling' is the name given to fishing by people who can't fish.

[PhilipCohen]

Hi Chrisgod,

Yes, I agree one has to choose one's words carefully when criticizing such activity generally. I have not dug any further into the matter except to look at a few of the buyer's feedback profiles (they were not active sellers but could be shill IDs requiring feedback numbers to make them look more legitimate).

Regardless, there apparently is a black-market trade in feedback going on; naturally, they will be $0.01 starts with free (or no) delivery and usually will be private listings (private listings for $0.01-start auctions?).

eBay should be doing something about this; unfortunately, eBay has only ever been interested in their own revenue—desperately so at the moment.

Do the experiment: select the price range $0.01 to say $0.20; set Location to Worldwide; set Buying formats > Choose more > Free postage; and then do a search for “free” and currently you will get 2826 items listed for sale. What would you think many of these listings are about? A search for “digital” likewise returns 415 items mostly obviously for feedback trading. A search for “ebook” returns 958 items mostly blatantly selling feedback. A search for “feedback” returns 364 items again mostly blatantly selling feedback.

Actually, I thought most people thought that PayPay did suck all the time! As “clunky” as PayPal is I think that they at least stop short of criminal facilitation, which is more than can be said of eBay.
_________________
Clearly, the lunatics at eBay have taken over the asylum and are bent on burning it down.
“The difference between genius and stupidity is that genius has its limits.” ~ Albert Einstein.