Penny Auction Scam Exposed by USCD Math students

there are a few arguments that are presented as to why the robots most likely belong to ArrowOutlet:

http://arrowoutletinfo.com/robots.php

When reading the article, you have to click "[Who are these robots?]" within the table in the center of the page.

Yes and no. The stated rules of these sites are profoundly unfair (even evil) but they are not, in and of themselves, scams. After all, someone has to win, and it's at least theoretically possible that the winner will have actually spent less than the items retail cost to get it. To quote Wikipedia's example:

  For example, if an item worth $1,000 sells at a final price
  of $60, and a bid costing $1 raises the price of the item
  by $0.01, the auctioneer receives $6,000 for the 6,000 bids
  and $60 as the final price, a total of $6,060. This
  represents a profit of $5,060 for the auction site.
  Assuming the winning bidder used 150 bids in the process,
  they would have paid $150 for the bids and $60 for the
  final price, a total of $210 and a savings of $790.

Of course, in a real auction, the winner may well end up paying more than $1,000 for the item...but still, it COULD work. But if bots run by the auctioneer always bid on items, then no actual person ever wins. In fact, the merchandise wouldn't even exist. (Why have a warehouse full of PS3s if nobody but the company ever "wins" an auction for one?) It's like a slot machine that never pays out.

And that would be fraud. (Also, an example of shocking greed, considering that the normal penny auction format is effectively a license to print money.)

When you signup, were you informed of the following?

"You understand and consent that you will be bidding against our robots, whose sole job is to take your money and waste your time."