It is Haram for anyone who offers their commodity for sale in a public auction to outbid for it
It is Haram (prohibited) for anyone who offers their commodity for sale in a public auction to set a price for it, even at or under its market value, or to charge a high price for it through bidding up against customers to increase its price, whether this person really wants to sell it in the auction or increases its price for future sale. It is also Haram for the seller to falsely claim that they have been offered a certain price for this commodity, because this is a form of Najsh (an illegal transaction in which the buyer is ensnared by artificial outbidding of a fake buyer), which is Haram in the Shari`ah. This also involves lying, cheating, deceit, wronging, and devouring people's property unjustly. The Shari`ah forbids the
Gharar sale (fraudulent transaction where details about the sold item are unknown or uncertain).
Ibn Al-Qayyim said: "Al-Gharar refers to ignoring an item’s characteristics and the consequences of this."
Najsh is absolutely Haram whether made by the commodity owner or by someone else who attends the auction with the purpose of raising the price without wanting to buy it; they seek to raise its price to harm the purchaser or benefit the seller or vice versa. Najsh committed by the commodity owner is more unjust than Najsh committed by anyone else.
May Allah grant us success. May peace and blessings be upon our Prophet Muhammad, his family, and Companions.