Brandt's Fully Private Auction Protocol Revisited

Abstract: Auctions have a long history, having been recorded as early as 500 B.C. Nowadays, electronic auctions have been a great success and are increasingly used. Many cryptographic protocols have been proposed to address the various security requirements of these electronic transactions, in particular to ensure privacy. Brandt developed a protocol that computes the winner using homomorphic operations on a distributed ElGamal encryption of the bids. He claimed that it ensures full privacy of the bidders, i.e. no information apart from the winner and the winning price is leaked. We first show that this protocol -- when using malleable interactive zero-knowledge proofs -- is vulnerable to attacks by dishonest bidders. Such bidders can manipulate the publicly available data in a way that allows the seller to deduce all participants' bids. Additionally we discuss some issues with verifiability as well as attacks on non-repudiation, fairness and the privacy of individual bidders exploiting authentication problems.