U.S. Criminally Charges EBay in Cyberstalking Case

The Justice Department charged eBay on Thursday with stalking, witness tampering and obstruction of justice in a rare 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 record for 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 was mildly critical of some of its behavior. The intimidation efforts included various forms of cyberstalking and harassment that were continuing when the perpetrators were arrested.

In its agreement with the government, eBay will engage an independent corporate compliance monitor. It also agreed to pay a criminal penalty of $3 million, the maximum fine for its six felony offenses. The government will not move ahead with the case unless the company violates the agreement.

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

“EBay engaged in absolutely horrific, criminal conduct,” said Joshua S. Levy, the acting attorney general. “The company’s employees and contractors involved in this campaign put the victims through pure hell, in a petrifying campaign aimed at silencing their reporting and protecting the eBay brand.”

David and Ina Steiner, writers and publishers of a news site and blog called EcommerceBytes, live in Natick, Mass.; eBay is based in San Jose, Calif. During the course of the harassment campaign, eBay security team members flew to Boston to accelerate their activities against the couple in-person. When they were caught, they began a cover-up and destroyed incriminating messages.

The forms of harassment included: threatening direct messages over Twitter, the social media platform that is now called X; attempts to install a GPS device on the Steiners’ car; posting ads for fictitious sexual events at the Steiners’ house; and sending anonymous and scary items like a bloody pig’s mask to the couple’s home.

A 24-page document detailing the charges that was released on Thursday broadens the number of eBay executives in the case. In earlier documents, only two executives were mentioned — the chief executive and the chief communications officer. Now there is a third executive, identified as eBay’s senior vice president for global operations.

“Sometimes, you just need to make an example out of someone,” read a text that the chief communications officer sent to the senior vice president on May 31, 2019. “Justice,” the text continued. The chief communications officer then wrote, referring to Ms. Steiner: “We are too nice. She needs to be crushed.”

A spokesman for Devin Wenig, who was eBay’s chief executive at the time, 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 reported facts that top executives didn’t like publicly laid bare.”

Seven individuals 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 either prison or home confinement. Jim Baugh, who ran 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 website. He added that eBay “remains committed to upholding high standards of conduct and ethics and to making things right with the Steiners.”

The Steiners’ efforts to reach a settlement with eBay collapsed long ago. The couple filed a lawsuit against eBay that is scheduled to go to trial next year.

“The Steiners’ goal was always to have the government hold all of those involved held criminally responsible, and this is a step in the right direction,” their lawyer, Rosemary Scapicchio, said on Thursday.