There are no laws against planting shills at an auction
Auctioneers don’t even need shills though, they can take bids ‘off the wall’ which means they accept an imaginary bid from someone who doesn’t exist – this is done when a naive bidder clearly demonstrates willingness to pay more for the item being auctioned
The practice is also called ‘rolling’ in some circles – the auctioneer ‘rolls’ past a price as though someone had bid that amount