I question what justice is being served here. This doesn't appear to be monopolistic control of the market or price fixing. Consumers are allowed to use price analysis, communication, and deal finding tools, so why not sellers?
If this is truly the first DoJ action prosecuting e-commerce, it makes me wonder if this is a case of someone being effectively forced into a plea, similar to what gets outlined here: https://news.ycombinator.com/item?id=9323758 This seems like peas compared to some of the recent alleged price-fixing scandals, i.e. Apple & e-books.
Topkins was accused of conspiring with other poster sellers to use algorithms, for which he wrote computer code, to coordinate price changes, and then share information about poster prices and sales.
In the absence of monopolistic control of the market/supply, I don't consider it any more meaningful than an attempt to optimize pricing.
It's an important difference, when a new seller can easily enter. Another commenter mentioned the price on a used book going up to $23 million based on algorithmic pricing. This creates an opportunity for another seller to sell the book at a reasonable price, while the two attempting to price collude sell nothing.
This is not the equivalent of a single entity acquiring an entire nations supply and distribution of oil to eliminate competition and raise prices, or five out of five major book publishers colluding on the pricing of new releases.
Price fixing isn't when a single company controls the market and jacks prices up, it's when multiple competitors in a market get together and say "Instead of competing, let's collectively inflate our prices so that we make more money."
As a recent example, LG, Samsung, Toshiba, Hitachi, Sharp, Sanyo Epson, and others all colluded to keep prices on LCD panels artificially high for years.
I suppose book selling has a much lower barrier to entry than LCD manufacturing, but it's still tough to argue that coordinating prices with your competitors is an acceptable practice.
Keeping consumers safe from the horror of an international poster monopoly?
His mistake wasn't creating a cartel, it was using big league price-fixing tactics while being a minor league player - or for impersonating a giant corporation while being a little person.
That will get you a nasty sentence if you try it and get caught.
Actual price-fixing by corporates is hardly rare, and it doesn't seem to attract much regulator interest. See e.g.
Regulators quite often take an interest in these things. That doesn't mean the regulatory agency always makes the first move. If you search for 'consumer price fixing litigation' you'll find plenty of examples,; top of my list was Apple being slapped with a $450 million fine for price-fixing of ebooks.
This guy is being hit with a $20,000 fine as part of a plea deal, which presumably means he's giving the state evidence on his co-conspirators. Perhaps they will get hit with fines in the $50-100,000 range; at a guess this vendor is having to disgorge his illicit profits but escaping any statutory penalties by cooperating.
Actually his mistake was sharing the information. Had he only used it himself to automatically undercut the competition where there was still a profit to be made he could have built himself a nice monopoly.
Or his competitors could have lowered their prices to compete with him, which is ideally how these things go. I don't think the higher priced competitors would have just poofed out of business.
I can't find the case file online and the details in the article are sketchy.
There have been cases where used books, worth less than $100, were being sold for over $23 million because two sellers are using the same automated pricing strategy which was to price 10% higher than the lowest price [1]. The software just kept moving the price up since they were the only two sellers.
My guess is that there was evidence of collusion in this case. It's the conspiring to fix prices that's the problem.
Still, the feds coming down on the little guy seems silly.
If this is truly the first DoJ action prosecuting e-commerce, it makes me wonder if this is a case of someone being effectively forced into a plea, similar to what gets outlined here: https://news.ycombinator.com/item?id=9323758 This seems like peas compared to some of the recent alleged price-fixing scandals, i.e. Apple & e-books.