Department of Justice Prosecution Targets E-Commerce in Prosecution For First Time Ever
E-commerce is a growing part of the domestic economy. In 2012, more than $1 trillion USD of retail sales were directly connected to online sales, and it was predicted that business-to-consumer e-commerce sales worldwide would reach $1.47 trillion in 2014, increasing almost 20% over 2013. As proof that e-commerce is quickly becoming a more vital part of the American economy, consider the fact that, for the first time ever, the U.S. Department of Justice’s antitrust division is specifically targeting Internet commerce in a prosecution.
“Today’s announcement represents the division’s first criminal prosecution against a conspiracy specifically targeting e-commerce,” said a statement from Bill Baer, Assistant Attorney General of the Justice Department’s antitrust unit.
Dave Topkins was accused of conspiring with other poster retailers to fix prices on the Amazon Marketplace, a place on Amazon.com where third parties can sell their products, between Sept. 2013 and Jan. 2014. According to reports, Topkins was accused of conspiring to with other retailers to use algorithms he wrote to coordinate price changes, and then share info on prices and sales to fix the market.
This activity — causing posters to be sold at “collusive, non-competitive” prices — violates the federal antitrust law the Sherman Act, the Justice Department said.
“We will not tolerate anticompetitive conduct, whether it occurs in a smoke-filled room or over the Internet using complex pricing algorithms,” said Baer. “American consumers have the right to a free and fair marketplace online, as well as in brick and mortar businesses.”
The charge against Topkins has a maximum 10-year prison sentence and $1 million fine. Topkins has agreed to plead guilty, pay a $20,000 criminal fine, and cooperate with the Department of Justice’s probe, although the deal still requires court approval.
Added FBI Special Agent David J. Johnson, “These charges demonstrate our continued commitment to investigate and prosecute individuals and organizations seeking to victimize online consumers through illegal anticompetitive conduct.”