The Justice Department charged eBay on Thursday with stalking, witness tampering and obstruction of justice in an unusual criminal case against a well-known Silicon Valley company.
The charges, which will be dropped under a deferred prosecution agreement if eBay maintains a good track record over the next three years, stem from actions taken by the company in 2019 to undermine and silence the writers of an e-commerce newsletter. that slightly criticized some of his behavior. The intimidation efforts included various forms of cyberbullying and harassment that continued when the perpetrators were arrested.
In its agreement with the government, eBay will hire an independent corporate compliance monitor. He also agreed to pay a criminal fine of $3 million, the maximum fine for his six felonies. The government will not pursue the case unless the company violates the agreement.
While money is inconsequential for a company that had more than $5 billion in cash on hand in its most recent quarter, notoriety is not.
“EBay engaged in absolutely horrific criminal conduct,” said Joshua S. Levy, the acting U.S. attorney. “The company employees and contractors involved in this campaign put victims through hell in a petrifying campaign aimed at silencing their reporting and protecting the eBay brand.”
David and Ina Steiner, writers and editors at a blog and news site called EcommerceBytes, live in Natick, Massachusetts; eBay is headquartered in San Jose, California. During the course of the harassment campaign, members of eBay's security team flew to Boston to accelerate their activities against the couple in person. When they were captured, they began a cover-up and destroyed incriminating messages.
Forms of harassment included: threatening direct messages via Twitter, the social media platform now called X; attempts to install a GPS device in the Steiners' car; posting advertisements for fictitious sexual events at the Steiner home; and sending anonymous and terrifying items, such as a bloody pig mask, to the couple's home.
A 24-page document detailing the charges released Thursday expands the number of eBay executives in the case. In previous documents, only two executives were mentioned: the CEO and the communications director. There is now a third executive, identified as eBay's senior vice president of global operations.
“Sometimes it's enough to set an example for someone,” said a text the communications director sent to the senior vice president on May 31, 2019. “Justice,” the text continued. The head of communications then wrote, referring to Mrs. Steiner: “We are too kind. She needs to be crushed.”
A spokesman for Devin Wenig, who was eBay's CEO at the time, had no comment. The other two former executives could not be located.
The Steiners said in a statement on their website that they were attacked “because we gave a voice to eBay sellers and because we reported on facts that senior executives did not like to be revealed 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 home confinement. Jim Baugh, who led the security team, was sentenced to 57 months in prison in September 2022. One person is still awaiting sentencing.
“The company's conduct in 2019 was wrong and reprehensible,” eBay CEO Jamie Iannone said in a statement on the company's website. He added that eBay “remains committed to maintaining high standards of conduct and ethics and doing right by the Steiners.”
The Steiners' efforts to reach a deal with eBay failed long ago. The couple filed a lawsuit against eBay that will go to trial next year.
“The Steiners' goal was always for the government to hold everyone involved criminally responsible, and this is a step in the right direction,” their attorney, Rosemary Scapicchio, said Thursday.
