04.27.2015

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Updates

The Antitrust Division of the U.S. Department of Justice recently announced its first criminal antitrust prosecution in e-commerce. David Topkins was charged on April 6, 2015, with price fixing in violation of Section 1 of the Sherman Antitrust Act in the online sale of decorative posters. Topkins agreed to pay a fine of $20,000 and cooperate in the Antitrust Division’s ongoing investigation of price fixing in the online wall décor industry, which includes posters, prints and other wall hangings.

Topkins, a former executive at an online art retailer, was charged with conspiring with competing online poster vendors to raise and fix prices for selected posters. An element of the agreement was the use of pricing algorithms that would eliminate or minimize any online price differences among the vendors. Topkins then wrote computer code to set prices for the selected posters in accordance with the agreement.

This prosecution is significant because the conspiracy lasted only a matter of months before it was challenged—from roughly September 2013 until January 2014. It is a reminder that notwithstanding the enormous volume of e-commerce, illegal online conspiracies can be implemented by conspirators and detected by law enforcement agencies in very short timeframes.

Price-fixing violations can carry a maximum sentence of 10 years imprisonment and a maximum criminal fine for individual offenders of $1 million and can result in civil class actions by injured consumers seeking treble damages. This prosecution highlights the need for e-commerce retailers and other technology businesses to understand and comply with the antitrust laws in order to avoid potential violations.

© 2015 Perkins Coie LLP