U.S. announces first antitrust e-commerce prosecution

(Reuters) - The U.S. Department of Justice’s antitrust division on Monday announced its first prosecution specifically targeting Internet commerce, saying a man has agreed to plead guilty to conspiring to illegally fix the prices of posters he sold online.

A zoomed image of a computer monitor shows a website selling button clipart for online shops in Vienna November 27, 2013. REUTERS/Heinz-Peter Bader

David Topkins was accused of conspiring with other poster sellers to manipulate prices on Inc’s Amazon Marketplace, a website for third-party sellers, from Sept. 2013 to Jan. 2014, according to papers filed in San Francisco federal court.

The Justice Department said Topkins also agreed to pay a $20,000 criminal fine and cooperate with its probe. His plea agreement requires court approval.

Contact information for Topkins’ lawyer was not immediately available. No one answered a phone call to a David Topkins listed in San Francisco.

Topkins was accused of conspiring with other poster sellers to use algorithms, for which he wrote computer code, to coordinate price changes, and then share information about poster prices and sales.

The Justice Department said this activity violated the Sherman Act, a federal antitrust law, by causing posters to be sold at “collusive, non-competitive” prices.

“We will not tolerate anticompetitive conduct, whether it occurs in a smoke-filled room or over the Internet using complex pricing algorithms,” Assistant Attorney General Bill Baer of the Justice Department’s antitrust unit said in a statement. “American consumers have the right to a free and fair marketplace online, as well as in brick and mortar businesses.”

Amazon Marketplace competes with eBay Inc in letting merchants sell goods online. It is separate from Amazon’s business where the Seattle-based company sells books, electronics and other goods online.

Amazon was not charged in the case against Topkins. It did not immediately respond to a request for comment.

The charge against Topkins carries a maximum 10-year prison term and $1 million fine, the Justice Department said.

The case is U.S. v. Topkins, U.S. District Court, Northern District of California, No. 15-cr-00201.