Tuesday, March 5

US criminally charges eBay in cyberharassment case

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

The charges, which will be dropped as part of a deferred prosecution agreement if eBay maintains a good track record over the next three years, stem from moves the company took in 2019 to undermine and silence the perpetrators of a e-commerce newsletter slightly critical of some of his behavior. The intimidation efforts included various forms of cyberstalking and harassment that continued when the perpetrators were arrested.

As part of its deal 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 criminal offenses. The government will not move forward with the case unless the company violates the agreement.

While money is inconsequential for a company that had more than $5 billion in cash in its most recent quarter, notoriety is not.

“EBay engaged in absolutely horrific criminal conduct,” said Acting U.S. Attorney Joshua S. Levy. “The company’s employees and contractors involved in this campaign put victims through hell, part of a petrifying campaign to silence their reporting and protect the eBay brand.”

David and Ina Steiner, writers and editors of a news site and blog called EcommerceBytes, live in Natick, Massachusetts; eBay is based in San Jose, California. During the harassment campaign, members of eBay’s security team traveled to Boston to accelerate their activities against the couple in person. When they were arrested, they began to cover up and destroy the incriminating messages.

Forms of harassment included: threatening 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 Steiner home; and sending anonymous, creepy items like a bloody pig mask to the couple’s home.

A 24-page document detailing the accusations, released Thursday, expands the number of eBay executives implicated in the affair. In previous documents, only two executives were mentioned: the general manager and the communications director. There is now a third executive, identified as eBay’s senior vice president of global operations.

“Sometimes you just need to make an example of someone,” reads a text the communications director 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 nice. “She needs to be crushed.”

A spokesperson for Devin Wenig, who was then chief executive of eBay, 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 publicly reported facts that senior management didn’t like.”

Seven people who worked for eBay’s 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 led 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 high standards of conduct and ethics and doing things right by the Steiners.”

The Steiners’ efforts to reach an agreement with eBay have long failed. The couple filed a lawsuit against eBay that is expected to go to trial 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 lawyer, Rosemary Scapicchio, said Thursday.