Shill bidding is the practice of placing fake bids — either by the seller, the auction house, or accomplices working with them — to artificially inflate the price of a lot. It is illegal in most jurisdictions, including under federal law in the US for online auctions.
Shill bidding is distinct from chandelier bidding (which is legal up to the reserve in most jurisdictions). Common online shill patterns: a seller bidding on their own lots from a second account, or coordinated bidder networks pumping each other’s lots. Modern auction platforms use IP tracking, account-relationship analysis, and bid-pattern detection to flag suspicious activity. Convicted shill operators face fines, civil judgments, and bans.