eBay says

Shill bidding undermines trust in our community and is not permitted on eBay. In addition, shill bidding is illegal in many areas with severe legal penalties. We want to ensure that all eBay users understand what shill bidding is, why eBay treats it so seriously, and what can happen if one engages in shill bidding. We also want to ensure that one does not unknowingly engage in the practice.

Can sellers bid on their own listings?

eBay originally allowed sellers to bid on their own listings as a way to close their listing without selling to the highest bidder. Because this privilege was abused it was eliminated. Therefore, bidding on your own item is considered shill bidding and is not allowed.

Illegal yet they allowed it??? Only cause it was abused did they disallow it??? Break the law according to them is o.k. as long as you don't abuse it??? I don't understand!!!