eBay alters new policy after users protest

Although company representatives said eBay still plans to implement new rules to govern reserve auctions, the company said in a message on its announcements board Sunday night that it has decided to decrease the amount it will charge sellers for offering such auctions.

And for now, the company has decided to put on hold a controversial plan that would require sellers in reserve auctions to set the minimum bid price of such auctions at 25 percent of their reserve price.

"There was some clear indication to us that there were other areas to explore and we wanted to do that," said company spokesman Kevin Pursglove. "We're always keeping our ears pretty close to the ground."

A reserve auction is one in which the seller sets a minimum sale price for the auction item. Prior to the new policy, which was slated to take effect on August 30, eBay allowed sellers to designate an auction as a reserve auction for free and didn't require sellers to disclose any information about their reserve price.

eBay said on Thursday that it would now charge users a $1 fee for each reserve auction they set, in part to defray the cost of explaining reserve auctions to bidders who were confused by them. It also said the new pricing was necessary to cover the administrative costs involved in such auctions, which it said have lower success rates than non-reserve auctions.

Instead of a flat fee for each reserve auction, the company said Sunday that it would charge just 50 cents on auctions with reserves of less than $25. The company said it would refund the fee if the auctions closed above the reserve price.

The company also said that instead of requiring the 25 percent of reserve minimum bid, it would explore other options such as special reserve auction icons or requiring sellers to disclose the actual reserve price.

"You asked us to consider other alternatives," the company said in its statement on the announcement boards. "We want to discuss the possible solutions with you."

eBay's retreat from its new policy, came as sellers, up in arms over the new policy, flooded message boards over the weekend on eBay, AuctionWatch, and Auction Patrol and sent numerous email messages to CNET News.com. Already upset by persistent outages at the company, many users were incensed that eBay declared the new policy without first discussing it with sellers.

Those with multiple listings were upset that the new fees would greatly increase the cost of their auctions. Others hated the new minimum bid policy, believing that requiring a minimum bid of 25 percent of the bid price would discourage bidding.

"This change will destroy my business," said eBay seller Edward Cohen in a letter to CNET News.com. Saying that he had been selling items on the site for two and a half years, Cohen added, "I am moving on to other venues."

Many other protestors also said that they would be taking their listings to other auction site such as those provided by Amazon.com, Yahoo, and newcomer Gold's Auction. However, eBay users have made similar threats during past protests over outages, and it remains to be seen if large numbers of them will defect from the site.

Meanwhile, eBay remains the dominant online auction site in terms of both users and simultaneous auctions.