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eBay backs down
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August 23, 1999: 9:38 a.m. ET
Online auctioneer alters new policies after intense user protest
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NEW YORK (CNNfn) - Online auction firm eBay Inc. has altered some of the controversial new restrictions and fees that raised an outcry among users of the service.
Those changes included a $1 fee for certain auctions and requirements for opening bids, both of which now are being delayed or altered.
eBay was trying to crack down on sellers who were using the service but not trying to auction products in a way eBay believed was realistic.
Specifically, eBay was concerned about the use of "reserve prices." These are prices the seller sets as the lowest acceptable bid to sell the product.
Sellers don't have to reveal the reserve price to bidders, and eBay claimed some sellers had set unrealistic reserve prices without offering up a product in good faith.
Additionally, eBay said it had received complaints from bidders who were frustrated by items that had reserve prices of $1,000 but opening bids of $1. This led them to believe the items were bargains that they may not have been.
Under the rules announced Friday, sellers would have had to set an opening bid that was at least 25 percent of the reserve price. It also said those who wanted to set a reserve price would have to pay $1 per auction.
Users flocked to eBay's message boards decrying the new measures, with some threatening to jump to other services that have no such restrictions.
In the face of such criticism, eBay said on its announcements board that it would lower the reserve fee to 50 cents per auctions with reserve prices of less than $25 and charge $1 for those reserve auctions above $25. Additionally, the fee will be refunded if the reserve price is met in the course of the auction.
eBay also postponed implementing the 25 percent minimum opening bid pending further discussion with sellers about better alternatives.
Still, eBay may find its problems aren't over. Even after the changes, users on eBay's message boards continued to complain about the fees and noted that eBay "is not the only market in the galaxy, online or offline." 
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eBay
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