"He is referring to an auction won when the under-bidder is a 'shill' ie bidding on behalf of the seller, which is illegal."

So is speeding and spitting on the sidewalk illegal ... but it happens all the time. I understand the scenario presented.

Again, if I bid "X" and win the item I'm bidding on ... I could care less if there were a half-dozen shill bids involved. I'm happy with my ebay purchase in spite of the sidewalk spitters and the cars that are wizzing past me.

Look at it another way. A house is on the market for sale. The seller tells you that she has received offers of $285,000 for the house (but does not disclose the "shill" offer was from her husband.) You're happy to get the place at $300,000 for the property and can't wait to sign on the dotted line.