A look at self bidding and auction sites. Should it be illegal? What is bad about it. >Read on
A recent article on Cnet claims that the FBI is investigating auction sites for self bidding to artificially inflate prices. The first thing that came to mind is why is the FBI getting involved? Don't they have better things to do? Besides being interested in finding out what is going on, is it really illegal to artificially bid up prices? I find it hard to believe that this could be illegal for small time players with insignificant supply. First, lets look at some similar activities that are illegal. If you get together with your competitors and set prices, then that is illegal. The same law could probably apply to the Internet. The result of set price or cartels is the consumer paying higher prices in a local physical area or the Internet. Well, the Internet is so big and their are so many participants that this would be difficult to do. This is especially true with reselling, because there are many other competitors outside of auction sites that would make this almost impossible. Most auction sites are reselling stuff that already has already been produced and changed hands from the manufacturer. Perhaps a group of people could work with a manufacturer to sell directly to them and they could sell the goods directly on Ebay and bid up prices so that the company could make more money for themselves, by inflating demand. This might be illegal. However, if someone sells something over the Internet and gets a group of friends to bid on there item, is it illegal? Are they defrauding potential buyers? Well, they aren't lying about the features of the product. Some of the bidders aren't ready and willing buyers, but most sellers outside of auctions do the same thing. When is the last time you went to a car dealership to look for a car? Many of the salespeople will say, "I just had three other people who were looking at the same car a little while ago." It may be an outright lie to help get the sale through, but is it illegal? The result of this if everyone did it would probably be higher prices for consumers and profits for the participants. So, the result would be inflation. The non-participants holding cash would be the most hurt by this because their dollars would buy less. Besides consumers, don't businesses have a right to sell products the way they wish? As long as they don't unite with others to effect prices across an entire industry, if they want to artificially inflate prices, isn't that their choice? They built the products/services, shouldn't they be able to sell it for how they want to? The question is, should we limit freedom which we value so highly for the benefit of the system or should we let it be?
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