Price fixing on Amazon Marketplace backfires: conspirators going to jail

Five individual sellers and four companies have been sentenced for participating in a price-fixing conspiracy, selling DVDs and Blu-Ray Discs on the Amazon marketplace.

According to court documents, the defendants agreed with co-conspirators to raise and maintain the prices of DVDs and Blu-Rays sold through Amazon marketplace storefronts, resulting in those products being sold at collusive and noncompetitive prices.

Price fixing is an illegal practice for sellers to work together to set prices for their products or services, which is unfair because it stops competition and raises prices for customers. Amazon Marketplace is an ecommerce platform that enables third-party vendors to sell new or used products alongside Amazon’s own offerings.

Five individuals and four companies have been sentenced, a press release from the US Department of Justice revealed.

One seller, Victor Btesh from New York, received the largest sentence of 18 months in prison, followed by two years of supervised release and a fine of $38,000.

His three companies, Michelle’s DVD Funhouse, MJR Prime, and Prime Brooklyn, were fined $156,520, $125,688, and $61,844 accordingly.

Additionally, the US District Court for the Eastern District of Tennessee sentenced other individuals and companies involved. Two sellers from New York will spend one month in prison, seven months confined at home, and will pay $55,000 criminal fines each.

A seller from New Jersey was sentenced to one month’s imprisonment, five months home confinement, and a $20,000 criminal fine.

One seller from Minnesota will spend six months in prison, six months in home confinement, will cover a $48,750 criminal fine, and his company was sentenced to an additional $234,000 criminal fine.

All punishments end with two years of supervised release.

“Americans are becoming increasingly reliant on online marketplaces, making it more important than ever to protect them from being cheated on the internet,” said Deputy Assistant Attorney General Manish Kumar of the Justice Department’s Antitrust Division. “These sentences reflect the Division’s commitment to seeking punishment for criminal antitrust violations wherever they may occur.”

U.S. Attorney Francis M. Hamilton III for the Eastern District of Tennessee emphasized that the office is committed to prosecuting price-fixing conspiracies and to protecting consumers from paying inflated prices in online marketplaces.“Activities related to price fixing and collusion do not promote an environment conducive to open competition, ultimately harming the consumer,” said Executive Special Agent in Charge Kenneth Cleevely of the U.S. Postal Service (USPS) Office of Inspector General.

A criminal violation of the Sherman Act carries a statutory maximum penalty of 10 years in prison, a $1 million criminal fine for individuals, and a $100 million fine for corporations.

The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.

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