Online marketplace eBay has agreed to pay $3 million to settle a criminal investigation in America after a married couple were subjected to a “petrifying” cyberstalking and harassment campaign in retaliation for perceived criticism of the site on their blog.
Federal prosecutors in Boston said that eBay had entered into a deferred prosecution agreement to resolve the case in which David and Ina Steiner were sent live cockroaches, a bloody Halloween pig mask, a funeral wreath and a book on surviving the death of a spouse.
Fake adverts were also posted on Craigslist inviting members of the public to attend sexual encounters at the couple’s home.
Joshua S Levy, the acting US attorney for the District of Massachusetts, said that senior executives at eBay became frustrated with the tone and content of the EcommerceBytes online newsletter, adding: “eBay engaged in absolutely horrific, criminal conduct. The company’s employees and contractors put the victims through pure hell in a petrifying campaign aimed at silencing their reporting and protecting the eBay brand.”
According to eBay’s admissions, in August 2019 Jim Baugh, eBay’s former senior director of safety and security and other members of its security team “executed a harassment campaign intended to intimidate the victims and to change the content of the newsletter’s reporting”.
They travelled to the couple’s home in Natick, Massachusetts, to carry out surveillance, and put a GPS tracking device on their car. The Steiners spotted the surveillance team and contacted the police.
After learning of the police investigation, Baugh and his team “deleted digital evidence related to the cyberstalking campaign and falsified records intended to throw the police off the trail”, the statement said.
Baugh was sentenced to 57 months in prison in September 2022, three former members of his team were jailed for between one and two years, and two others were sentenced to a year of home confinement. Brian Gilbert, a former senior manager of security operations, has pleaded guilty and is awaiting sentencing.
The Steiners said: “We launched our news site in 1999 to help regular people and small businesses succeed in selling online. We were targeted because we gave eBay sellers a voice and because we reported facts that top executives didn’t like publicly laid bare.”
They added: “Since the government first arrested some of the perpetrators and filed charges in June 2020, we have heard from sellers who are fearful of communicating legitimate concerns to us (or to eBay and other marketplaces) because they fear retaliation. Not only is that devastating to hear, but when sellers are afraid to speak up, it undermines our reporting.”
Jodi Cohen, the special agent in charge of Boston’s FBI division, said the settlement “holds eBay criminally and financially responsible for emotionally, psychologically, and physically terrorising the publishers of an online newsletter out of fear that bad publicity would adversely impact their Fortune 500 company”.
Jamie Iannone, eBay’s chief executive, said in a statement that the company’s behaviour was “wrong and reprehensible”, and that eBay was “committed to upholding high standards of conduct and ethics and to making things right with the Steiners”.
The California-based company has agreed to retain an independent corporate compliance monitor for three years and must make changes to its compliance programme. Charges would be dropped after three years if it complies with the deal under the terms of the agreement.
