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Sounds like the bidder used maximum bid option and someone else was trying to outbid him. The maximum bid option will automatically bid up for you, to outbid the last bidder. Example: your maximum bid is $10 and the current price is $5; the bidding increments are $1; if someone bids $6, the system will tell that bidder that he has been outbid, then place the bid of $6 for the bidder with the maximum bid of $10. This could go on until the bid reaches over $10.
I am also aware of sniping software, but it doesn't sound like it was used in this case. I know what you are going through, E-bay bidding is a pain. That is why I use "buy it now" most of the time.
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