Initially, at least. As Brooks gained confidence and power, their strong, and notably different, personalities began to chafe. "Al and Dede used to be very close," recalls one Sotheby's insider. "Then she really started resenting having someone to report to -- and he's not easy to report to -- so she did a lot of things he wasn't happy about. But his view was that you can't take her power away. She took total advantage, and got free rein because she was making money for the stockholders. Over time, she kept him out of the business."

As competition between Sotheby's and Christie's grew fiercer, the practice of eliminating the seller's commission in order to win business spiraled into a pattern of increasingly extravagant inducements. Cajoled over boardroom banquets and Upper East Side dinners given by prominent socialites paid by Christie's and Sotheby's to drum up business, prospective sellers were enticed with offers of free cataloguing, insurance, shipping, or world tours of their collections, all at the auction houses' expense.

Something, clearly, had to give. On March 10, 1995, Christie's announced the introduction of a nonnegotiable sliding scale of seller's commissions, ranging from 2 to 10 percent, based on the value of each consignment. Five weeks later, on April 14, Sotheby's matched Christie's scheme precisely.

Many close to Taubman seem genuinely flabbergasted that he could have been involved in an illegal scheme. "Alfred is honorable to a fault," says a former Sotheby's expert. "He's so honest and aboveboard, I find it impossible to believe he'd knowingly do anything illegal. It's just not in his character."

Aside from some astonishment that Sotheby's, traditionally the more aggressive firm, appeared to be taking its lead from Christie's, few expressed surprise at the identical fees. "Obviously, it was in both our interests to charge the same commission," recalls Christopher Gow. "So no one seemed to suspect that anything illegal was going on."

Legal or not, the results were notably effective for both houses. Christie's profits leaped from $25.2 million in 1994 to $33.9 million in 1995 to $53.6 million in 1996, while Sotheby's profits jumped from $20.3 million to $32.6 million to $40.9 million over the same period.

"If you think hearing about those kinds of numbers drove dealers crazy with suspicion, you're right," says the contemporary-art dealer in SoHo.

News of their monstrous legal woes comes at a critical time for both companies, as Sotheby's seeks to tout the viability of its controversial new online auction site, www.sothebys.com -- launched in January at a staggering to-date cost of $41 million -- while Christie's hopes to justify its radical decision to remove itself from the fray of high-volume, low-value online commerce.

Fiscal prognosticators at both firms weighing their online options back in 1998 could hardly fail to notice the mounting success of eBay, whose 10 million registered users last year generated $4 billion in sales with a $215.9 million profit for the San José, California-based company. Ostensibly, of course, the traditional auction houses have very different reputations, and merchandise, to sell. Last year, the average lot on eBay sold for $40 -- a far cry from the $60.5 million fetched at Sotheby's last year for Cézanne's Rideau, Cruchon et Compotier and the $45 million for Picasso's Nu Au Fauteuil Noir at Christie's.

Sotheby's, the traditional innovator of the two firms, moved first to hoist its venerable name online for Internet auctions. Behind this effort was David Redden, the entrepreneurial head of Sotheby's books-and-manuscripts department. Last June, Sotheby's announced a deal with Internet giant Amazon.com to launch sothebys.amazon.com, a site for novice collectors. To cement the deal, the Seattle-based Amazon agreed to invest $45 million in stock, host the site at its Seattle headquarters, and provide the technology, the site design, and half the marketing costs.

Audacious as it may have been as a business move, the creation of sothebys.amazon.com struck some in the art world as a dubious achievement, guaranteed to dilute some of the glamour of the Sotheby's name. "It makes you wonder what Sotheby's is thinking," notes a leading decorative-arts dealer in Chelsea. "Sothebys-dot-Amazon-dot-com -- it sounds like Hermès-dot-Kmart-dot-com."

As a counterweight to the mass-oriented Amazon site, Sotheby's has also established sothebys.com, an elite Website for what it sees as a discerning but untapped global audience. "It's been a gleam in the eye for quite some time," Redden says of the site, which consumed an alarming $40 million of capital in 1999 alone. Designed to offer fine and decorative art, antiques, jewelry, watches, and books, it was launched in January with a $15 million advertising campaign.