The U.S. Department of Justice announced that it has charged a former e-commerce executive with price fixing, in what would be the DoJ's antitrust division's first online marketplace prosecution. The defendant is charged with price fixing in violation of the Sherman Act, which carries a maximum sentence of 10 years and a fine of $1 million for individuals.
David Topkins, who sold posters and other art through Amazon Marketplace, is facing a one-count felony charge, which was filed in the U.S. District Court of the Northern District of California in San Francisco. It alleges that Topkins and his "co-conspirators" fixed prices of certain posters sold from September 2013 through January 2014. The charge also alleges that Topkins and said co-conspirators adopted "specific pricing algorithms for the sale of certain posters with the goal of coordinating changes to their respective prices, and wrote computer code that instructed algorithm-based software to set prices."
The prosecution of Topkins came about from an investigation into price fixing in the online wall décor industry. The DoJ's antitrust division is still conducting this with help from the FBI. Topkins agreed to plead guilty and pay a $20,000 criminal fine as well as cooperate with the ongoing investigation. The plea agreement is still subject to court approval. The maximum fine of $1 million can be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either amount is greater. It's unclear what those figures are in this case.
“Today’s announcement represents the division’s first criminal prosecution against a conspiracy specifically targeting e-commerce,” said Assistant Attorney General Bill Baer of the Department of Justice’s Antitrust Division. “We will not tolerate anticompetitive conduct, whether it occurs in a smoke-filled room or over the Internet using complex pricing algorithms. American consumers have the right to a free and fair marketplace online, as well as in brick and mortar businesses.”
“These charges demonstrate our continued commitment to investigate and prosecute individuals and organizations seeking to victimize online consumers through illegal anticompetitive conduct,” said Special Agent in Charge David J. Johnson of the FBI’s San Francisco Field Office. “The FBI is committed to investigating price fixing schemes and remains unwavering in our dedication to bring those responsible for theses illegal conspiracies to justice.”
Amazon itself, which has not been implicated in the case, has so far remained silent on the news.