Monday, May 20

The United States criminally charges eBay in a cyberstalking case

The Justice Department on Thursday charged eBay with stalking, witness tampering and obstruction of justice in a rare criminal case against a well-known Silicon Valley firm.

The charges, which will be dropped under a deferred prosecution agreement if eBay maintains a good record for the next three years, stem from actions the company took in 2019 to undermine and silence the authors of an e-commerce newsletter which was slightly critical of eBay. some of his behaviors. The intimidation efforts included various forms of cyberstalking and harassment that continued even at the time of the perpetrators’ arrest.

In its settlement with the government, eBay will use an independent corporate compliance monitor. He also agreed to pay a criminal fine of $3 million, the maximum fine for the six crimes committed. The government will not pursue the case unless the company violates the agreement.

While money is irrelevant to a company that had more than $5 billion in cash in its latest quarter, notoriety is not.

“EBay has engaged in absolutely horrific criminal conduct,” said Joshua S. Levy, the acting U.S. attorney. “The company employees and contractors involved in this campaign subjected victims to hell, in a petrifying campaign aimed at silencing their complaints and protecting the eBay brand.”

David and Ina Steiner, writers and editors of a news and blog site called EcommerceBytes, live in Natick, Massachusetts; eBay is headquartered in San Jose, California. Amid the harassment campaign, members of eBay’s security team flew to Boston to accelerate their efforts against the pair in person. When they were caught, they began a cover-up and destroyed the incriminating messages.

Forms of harassment included: threats via direct messages on Twitter, the social media platform now called X; attempts to install a GPS device on the Steiners’ car; posting advertisements for fictitious sexual events at the Steiners’ home; and sending anonymous, scary items like a bloody pig mask to the couple’s home.

A 24-page document detailing the allegations, released Thursday, expands the number of eBay executives involved in the case. In previous documents, only two executives were mentioned: the CEO and the head of communications. There is now a third executive, identified as eBay’s senior vice president of global operations.

“Sometimes, you just have to set an example for someone,” reads a text the communications manager sent to the senior vice president on May 31, 2019. “Justice,” the text continues. The communications manager then wrote, referring to Ms. Steiner: “We are too kind. She needs to be crushed.

A spokesman for Devin Wenig, eBay’s chief executive at the time, had no comment. The other two former executives could not be reached.

The Steiners said in a statement on their website that they were targeted “because we gave a voice to eBay sellers and because we reported facts that senior executives did not like being exposed publicly.”

Seven people who worked for eBay’s corporate security team were arrested for their actions against the Steiners in 2020. All pleaded guilty, and six of them were sentenced to prison or house arrest. Jim Baugh, who ran the security team, was sentenced to 57 months in prison in September 2022. One individual is still awaiting sentencing.

“The company’s conduct in 2019 was wrong and reprehensible,” Jamie Iannone, eBay’s chief executive, said in a statement on the company’s website. He added that eBay “remains committed to upholding high standards of conduct and ethics and to making matters right with the Steiners.”

The Steiners’ efforts to reach a settlement with eBay failed long ago. The couple have filed a lawsuit against eBay that is expected to go to court next year.

“The Steiners’ goal has always been to have the government hold everyone involved criminally accountable, and this is a step in the right direction,” their attorney, Rosemary Scapicchio, said Thursday.