it's called shill bidding and it is illegal on ebay.
Shill bidding happens when anyone bids on an item in order to artificially increase its price or desirability. Shill bidding also happens when someone a seller knows bids on the seller's item. This includes family members, friends (including online friends), roommates, or employees.
take a look at the winning bidder's stats, it really does make you wonder...
<table border="0" cellpadding="0" cellspacing="0" width="100%"><tbody><tr><td valign="top" width="33%"><table class="contentValueFont" border="0" cellpadding="0" cellspacing="0"><tbody><tr><td colspan="2">
Bidder Information</td> </tr> <tr> <td nowrap="nowrap">Bidder:</td> <td nowrap="nowrap">
m***m
( 1 )
</td> </tr> <tr> <td nowrap="nowrap">Feedback:</td> <td nowrap="nowrap">
0%
Positive </td> </tr> <tr> <td nowrap="nowrap">Item description:</td> <td nowrap="nowrap">
Item Title: Porsche : 911</td> </tr> <tr style="padding-top: 2px;"> <td nowrap="nowrap">Bids on this item:</td> <td nowrap="nowrap">
11</td> </tr> </tbody></table> </td> <td width="50">
</td> <td>
</td></tr></tbody></table>