Evaluation of Online Auction Mechanism As Per Islamic Norms of Transactions

Online auctions have gained tremendous popularity in the last one decade. In order to make this mechanism more attractive to Muslims, online auctions can be conducted as per the norms of business transactions in Islam. This paper includes a discussion on these aspects. By incorporating the norms such as prohibition of Riba (interest), avoidance of Gharar (excessive uncertainty) and the elimination of Qimar (gambling) from auction contracts, the conventional online auction formats can be made more compatible with Shariah guidelines. An online auctioneer is also allowed to charge auctioneer's fee from the bidders subject to certain conditions. Instances of frauds in online auctions are also analyzed in this paper from Shariah perspective