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eBay chief executive Meg Whitman has been advising politicians on measures to tackle problems such as shill bidding (the illegal practice of artificially driving up bidding prices on behalf of the seller).

Ms Whitman is adamant that the practice is not as prevalent as some believe it to be. “Rotten apples represent less than one tenth of a per cent,” she said. In answer to the question “Are online auction companies successful in detecting shill bidders?” she outlined new software recently implemented by her company that she said has proved “very sensitive” in the detection of shill bidding.

The eBay auction site was the vehicle used in the first criminal case to result from shill bidding online. Three men were charged in March with conspiring to drive up auction prices by posting more than 50 illegal bids on a painting faked to appear as though it had been painted by the artist Richard Diebenkorn.

Ms Whitman is also advising Washington on online auction rules, online payment methods and the value of feedback ratings. She expressed particular concern about the issue of ‘harvesting’ (the poaching of e-mail addresses for solicitation) and recommended legislation to counter the practice.

Congress continues to examine ways to protect consumers online in the light of a recent study conducted by the Internet Fraud Complaint Center who reported that from May to November 2000, auction fraud accounted for 64.1 per cent of Internet fraud complaints filed. The ability to disguise identity, revoke bids and maintain multiple online identities during Internet auctions may encourage undesirable practices such as shill bidding.