GoDaddy explains what it’s doing about shill bidding

Company says shill bidding has decreased this year after implementing new strategies.

GoDaddy has published an in-depth look at what it is doing to combat auction fraud, and I think it’s worth taking a look.

The company has taken some heat becuase people have used multiple bidder accounts to coordinate fraud. As the post succinctly summarizes:

Bad actors would place low bids and then raise them to unreasonably high amounts to disincentivize genuine buyers from bidding. When the high bidder didn’t pay, they would try to acquire the domain as the second-highest bidder, avoiding payment for the inflated bid.

GoDaddy says it has undertaken a number of steps to cut down on this sort of activity. A big one was introducing a new bidder ID verification system this year. It says a lot more is happening behind the scenes.

The company nixed seller auctions this year, which should have eliminated a big incentive for what the company calls “Sell/Solo” shill bidding, in which someone inflates the price of their own listings. But there’s still an incentive to drive up prices if there’s a way to win domains at lower prices, so the company needs to remain vigilant.

I’d like to hear from GoDaddy Auctions customers if they’ve noticed a reduction in non-paying bidder issues from August onward. Leave a comment or send me an email.