An eCommerce executive will plead guilty and pay a $20,000 fine in the U.S. Justice Department’s first prosecution for online price fixing, the department announced on Monday (April 6).
David Topkins, a former executive at Art.com, was charged in U.S. District Court in San Francisco with working with co-conspirators to fix the prices of certain art posters sold online. The posters were sold through Amazon Marketplace between September 2013 and January 2014. The other co-conspirators were not named in the Justice Department announcement, and Amazon was not accused of having any part in the price-fixing conspiracy.
Topkins will plead guilty, pay the $20,000 criminal fine and cooperate with an ongoing federal antitrust investigation. He faced a maximum sentence of 10 years in prison and a $1 million fine under the federal Sherman Act.
“Today’s announcement represents the [Antitrust Division’s] first criminal prosecution against a conspiracy specifically targeting eCommerce,” Assistant Attorney General Bill Baer said in a prepared statement. “We will not tolerate anticompetitive conduct, whether it occurs in a smoke-filled room or over the Internet using complex pricing algorithms.”
According to the charge, Topkins and his 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 in conformity with this agreement,” the Justice Department announcement said.
The Justice Department didn’t name Topkins’ company, but he worked for Art.com at the time and was fired along with two business partners in January 2014 after being “interrogated about unspecified trade practices,” the San Francisco Appeal reported.
While the Topkins poster price-fixing case is the Justice Department’s first criminal antitrust eCommerce prosecution, it’s far from the first time “antitrust” and “eCommerce” have shown up in legal actions. Most recently, eBay’s StubHub subsidiary sued Ticketmaster’s NBATickets.com and the NBA’s Golden State Warriors in March, accusing them of violating antitrust laws by canceling tickets to Warriors’ games purchased online through StubHub.