The former head of an e-commerce company (creatively called Company A) has been indicted by the U.S. Department of Justice for allegedly fixing prices on Amazon, using a complex algorithm he developed.
The DOJ bills it as its Antitrust Division's "first online marketplace prosecution."
The online industry that the San Francisco man, David Topkins, has already plead guilty for wresting control of? The shady world of wall decor.
Specifically, the world of posters, or as the Justice Department defines them: "Pieces of paper depicting printed images that are designed to be hung, mounted on, or affixed to a wall or other vertical surface."
(We reached out the the DOJ and Amazon to find out if your newly purchased Bob Marley or Obama "Hope" poster is implicated, but we haven't heard back yet.)
"Beginning as early as September 2013 and continuing until in or about January 2014, the defendant and his co-conspirators entered into and engaged in a combination and conspiracy to fix the prices of certain posters sold in the United States on Amazon," alleges the federal indictment, filed on Monday.
To fix prices, the document says, Topkins did what any other Bay Area resident would do: he turned to code. From the indictment:
Topkins is charged with price fixing in violation of the Sherman Act, which carries a maximum sentence of 10 years in prison. According to his guilty plea, which still has to be approved by the courts, he has agreed to pay a $20,000 criminal fine and cooperate with an ongoing investigation.
The DOJ says it will "not tolerate anti-competitive 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.” said Assistant Attorney General Bill Baer of the Department of Justice’s Antitrust Division in a release.
We might never know the prosecution's full case against Tompkins, since the case isn't going to trial, but the indictment does bring up an interesting question.
Are feds in essence saying that fixing prices on Amazon means you are fixing prices period? Amazon is just one corner of the online marketplace (okay a MASSIVE corner), but is it THAT big? If we see another one of these soon it will give a bit more insight into how the feds are thinking, or if Amazon has reached the status of "too big to fix."
Daniel Rivero is a producer/reporter for Fusion who focuses on police and justice issues. He also skateboards, does a bunch of arts related things on his off time, and likes Cuban coffee.