Of course “shill” bidding (ie,
undisclosed vendor bidding) is fraud, and it always has been fraud!
Seriously, how can anyone think that the making of a false representation for the purpose of gaining an advantage can be anything but fraud? Even under the common law such activity would be fraud. The relatively new UK Fraud Act 2006 simply makes clearer what admittedly was so absurdly ambiguous in the old Sale of Goods Act.
The problem, however, will always be the proving of shill bidding without the cooperation of the auctioneer, when unscrupulous organizations such as eBay benefit from such criminal activity and do effectively nothing proactively to stop it.
A Summary of Statute Law on (Shill Bidding) Fraud: US, UK, AU, at
http://www.auctionbytes.com/forum/phpBB/viewtopic.php?t=24316