Theres been a thread on this pretty much every week since it came out.
Working as intended, just like ebay works, not how wow works.
Seller lists item for 0 gold for 24 hours.
Buyer 1 places bid for 100000 gold - High bid 1 gold Buyer 1
Buyer 2 places bid for 200000 gold - high bid 100001 gold Buyer 2
Buyer 1 places bid for 150000 gold - high bid 150001 gold Buyer 2
Buyer 1 places bid for 300000 gold - High Bid 200001 gold Buyer 1
You should get the idea from there.