The Justice Department hit eBay on Thursday with charges of stalking, witness tampering, and obstruction of justice in a rare criminal case against a well-known Silicon Valley company.
The charges, which will be dismissed under a deferred prosecution agreement if eBay remains in good standing for the next three years, originated from actions taken by the company in 2019 to subvert and silence the authors of an e-commerce newsletter that was mildly critical of some of its behavior. The intimidation tactics involved various forms of cyberstalking and harassment that were ongoing when the perpetrators were apprehended.
In its deal with the government, eBay will appoint an independent corporate compliance monitor. It also consented to pay a criminal fine of $3 million, the maximum penalty for its six felony offenses. The case will not proceed unless the company violates the terms of the agreement.
Although the money is negligible for a company that had over $5 billion in cash on hand in its most recent quarter, the notoriety is significant.
“EBay engaged in absolutely horrific, criminal conduct,” said Joshua S. Levy, the acting U.S. attorney. “The company’s employees and contractors involved in this campaign put the victims through pure hell, in a petrifying campaign aimed at silencing their reporting and protecting the eBay brand.”
David and Ina Steiner, writers and publishers of a news site and blog called EcommerceBytes, live in Natick, Mass.; eBay is based in San Jose, Calif. During the course of the harassment campaign, eBay security team members flew to Boston to accelerate their activities against the couple in person. When they were caught, they began a cover-up and destroyed incriminating messages.
The forms of harassment included: threatening direct messages over Twitter, the social media platform that is now called X; attempts to install a GPS device on the Steiners’ car; posting ads for fictitious sexual events at the Steiners’ house; and sending anonymous and scary items like a bloody pig’s mask to the couple’s home.
A 24-page document detailing the charges that was released on Thursday broadens the number of eBay executives in the case. In earlier documents, only two executives were mentioned — the chief executive and the chief communications officer. Now there is a third executive, identified as eBay’s senior vice president for global operations.
“Sometimes, you just need to make an example out of someone,” read a text that the chief communications officer sent to the senior vice president on May 31, 2019. “Justice,” the text continued. The chief communications officer then wrote, referring to Ms. Steiner: “We are too nice. She needs to be crushed.”
A spokesman for Devin Wenig, who was 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 eBay sellers a voice and because we reported facts that top executives didn’t like publicly laid bare.”
Seven individuals 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 either prison or home confinement. 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 website. He added that eBay “remains committed to upholding high standards of conduct and ethics and to making things right with the Steiners.”
The Steiners’ attempts to reach a settlement with eBay failed long ago. The couple filed a lawsuit against eBay that is scheduled to go to trial next year.
“The Steiners’ goal was always to have the government hold all of those involved held criminally responsible, and this is a step in the right direction,” their lawyer, Rosemary Scapicchio, said on Thursday.
