UK Amazon seller raided by the FBI for price fixing
A British Amazon seller faces possible extradition to the States following FBI led raids on his UK premises last month.
The allegation is that the company director “and his co-conspirators fixed the price of certain posters sold online through Amazon Marketplace from as early as September 2013 to in or about January 2014“. In the US this comes under the Sherman Act which deals with antitrust (anti-cartel) issues.
In a salutatory reminder to UK sellers that just because America is thousands of miles away and the other side of the Atlantic, it doesn’t mean you’re totally immune to their law. The seller is charged with price fixing in violation of the Sherman Act, which carries a maximum sentence for individuals of 10 years and a fine of $1 million.
West Midlands Police, handling the raids on behalf of the FBI, successfully conducted searches of the companies premises as well as the owner’s home in West Midlands early in December, along with UK Competition and Markets Authority officers. Bizarrely the business has less to worry about in the UK as it’s a civil matter, whereas in the US the company and owner are facing criminal charges.
The US Department of Justice say “It doesn’t matter whether price-fixers operate from an office in California or a warehouse in England. We will continue to prosecute conspiracies that subvert online competition“.
It’s a worrying time for the business and in particular the director who has our greatest sympathies. It’s the first time we’ve heard of a UK marketplace seller facing extradition to the US for alleged price fixing. However the law is the law and no matter which countries you choose to trade in you need to ensure you abide by local customs and legislation.
Its time the FBI got involved with chinese fakes then
Change the record please
so chinese fakes become normal & acceptable because its old news & boring then ?
& price fixing is somehow more urgent because its current,
so the the Laws the Law but only if its a a warehouse in England
I’m with you on this one Tinker, cheap fake chinese imports have undermined our business so much that before we consider buying any stock we research the chinese VAT avoiding fraudster competition on eBay and Amazon and decide whether it’s worth it or not.
Most times it isn’t worth it, which is a shame
I’m with you! I’m a savvy well experienced buyer and seller like most on here. However, can I buy a simple thing like a Genuine Samsung Battery without going to the Samsung High Street B&M stores… nope!
I’ve bought just about every one from cheapy cheap through to £25 “Genuine” “official” “with Samsung seal” etc etc.. ALL have been fake and 3 have melted! Each time I raise the issue with the seller I get an immeadiate refund and a message in broken English to apologoise and begging for no bad FB. 3 were the exact same wording – but all apparently came from the UK. The whole Chinese thing is ruinning the UK economy and not just from a VAT p.o.v – There is no consumer confidence any longer.
vast amounts of authentic and genuine collectables and antiques have lost value because no one is sure if they are fake or not, so they dont buy them,
they even fake “records” lol
‘Poster price fixing’ don’t accept it. Its a crime !
Not like petrol, gas and electric price fixing, all perfectly legal of course.
Seems weird the FBI pursuing a price fixing case on £5 posters over a 5 month period.
But I find it weider that the guy decided to get involved a price fixing agreement on posters that cost £5! If you’re struggling with the margins, just leave the product and move onto something else…
A strange story this – why choose to intervene across the pond over cheap posters sold over a short period? Consider the “fixing” that takes place in the financial markets, in the silver trade, in Chinese goods etc. There must surely be a story behind this story., though we’re unlikely to ever hear it.
What’s especially strange, is that Amazon themselves are involved in a form of price fixing with their Price Parity policy.
Sure it was scrapped in the EU, but it’s still in place in the US:
(General Pricing Rule: By our General Pricing rule, you must always ensure that the item price and total price of an item you list on Amazon.com are at or below the item price and total price at which you offer and/or sell the item via any other online sales channel.)
I’ve had first hand experience with Amazon price fixing at my previous company. We were given a really good price on a speaker from a certain electrical manufacturer on the promise that we wouldn’t compete with Amazon on the price even though we could with the price we were given.
Cue 3 months later and very little movement on stock we decided to cut the price for a few days. We had a very angry call within a few hours from our contact at the manufacturer saying Amazon had called him and were threatening to refuse to buy anything from them at all ever again unless we increased our price on the item in question.
He was so fearful because Amazon spent so much with them that they agreed to buy back our stock at no loss to us and we stopped selling the speaker pretty much straight away. I have heard similar things happening with other companies and I certainly don’t believe that we were a one off.
“It doesn’t matter whether price-fixers operate from an office in California or a warehouse in England. We will continue to prosecute conspiracies that subvert online competition“.
thats the internet buggered then!
Does this work the other way round…../
Ask a few book sellers about Amazon!!
Has anyone actually successfully reported price fixing to Trading Standards? We had an issue where a German company wanted us to raise our prices 50% even though we were at their official RRP (albeit converted from EUR to GBP). When we didn’t comply they reported all our Amazon listings as fakes. I asked Trading Standards whether I should report it to them or the German equivalent and they said they can’t comment on such matters. I understand that they can’t comment on current investigations but how are we even meant to report things if they won’t tell us how?
ebay had great fun with the french perfume industry though it was not price fixing as such ,it all boiled down to maintaining prices, there are dozens of other large companies who manipulate the market place to maintain prices
The story sounds utterly bizarre, are you sure there’s not more to it? And why is it the US can extradite with such apparent ease? Imagine the outcry trying to bring a seller of posters from the US to the UK to face trial! It would never happen.
UK seller, selling on Amazon.com (and assumably sending to the US from the UK) would need to price fix the price upwards, to pay the Airmail charges involved….Surely!!
Good to see that with all Americas internal issues the good old FBI have time to pursue things like this… A bit like the Uk and speed traps… The money just seems to be there when it isnt for other things!
I must admit that I am confused with this one. As I understand it ‘Price Fixing’ is where 2 or more competing businesses get together to fix the price of certain items between them. So they all sell at the same price higher than would occur if they were genuinely competing with each other. This when it happens is usually on such as Petrol, Electricity and high volume items or perhaps Industrial Raw Materials such as Petrochemicals. Do Posters really fall into the category of high volume?
Now I do not know what sort of posters he sells or the price but is there really a market big enough to worry anybody?
Obviously the US Authorities are concerned but do the volumes and the annual turnover really warrant such heavy handed action? Or is it the case of the Gangster US Authorities attempting to eliminate one more competitor. Which is far more likely.
It doesn’t make sense, simply doesn’t make sense at all, until you take into account two factors.
First is that this may be a simple “test case” that the Authorities on BOTH sides of the pond have set up so that there will be clear precedents for bigger cases. If so they will undoubtedly pick something simple and clear cut simply to prove they can do it.
Second is that so much “co-operation” across the pond simply isn’t a level playing field. Whilst the Yanks impose numerous difficulties to both goods and people entering the US our “arse licking” government simply responds to them by saying “The answer is yes . . now what is the question?”.
Mentioning our issues with the Chinese once more simply highlights a weak government when it comes to illegalities in our domestic market . . not sure but I don’t think the Yanks tolerate so much themselves.
From the Mail :
A statement, on the site, Assistant Attorney General Bill Baer, of the Justice Department’s Antitrust Division said: ‘US consumers deserve competitive markets when they shop online,’ he said.
‘We will continue to prosecute conspiracies that subvert online competition’
So Amazon don’t do that then ?
Ha! Ha! ha! Ha! ha!
Now I sell mainly Books. Just about every Book has its price printed on it. So if I and a dozen other Book Sellers are selling the Books for the same price does that mean that we are going to run up against the Americans Anti Trust regulations because obviously we are all colluding????
I simply do not comprehend how a UK seller can compete with a US seller on US sales, neither can a US seller compete with a UK seller on UK sales, so where is the antitrust?.
The cost of P&P is simply too great between the two continents, unless of course the P&P costs to the buyer(s) are not taken into account when they scream antitrust (anti-cartel) AND IF SO it which rather make the whole thing a silly, silly exercise on the US behalf.
Oh, and I hope the US are paying for the UK’s police time considering we (the Uk’s ordinary resident citizens) are all not getting anything from the Police nowdays.
Oh, and don’t even start on the one way traffiic the UK has with the US, we jump when they say jump, they say Foff when we ask…politely….
Since everyone seems to be too lazy to Google for the back story…
David Topkins is an American businessman who founded Poster Revolution which was bought by Art.com in 2012. In January 2014 he and two other business partners were fired by Art.com after being “interrogated about unspecified trade practices”. Topkins (and those other partners) also worked at their other company Gotham City Online which then sued Art.com claiming that Art.com owed them millions and had hacked their servers and stolen trade secrets. The case was dismissed.
Art.com then reported Topkins to the feds for his “trade practices” which included communicating with competitors and writing a price matching algorithm. Topkins had to pay a $20k fine and cooperate with the feds. That’s clearly how the UK seller was dragged in and considering how light Topkins got off I doubt he will be in too much trouble.
The people involved are not bedroom sellers – they are millionaires (Art.com’s revenues for 2013 were apparently $200m). However this case does indicate that the US might be interested in banning automatic price matching.