Ecommerce giant eBay is in the news again for allowing the sale of illegal items on its platform and has agreed to pay $59 million to resolve allegations that the sales of pill presses violated the Controlled Substances Act (CSA). This is far from the first time that eBay has been caught red-handed allowing illegal items to be sold on its website.
But it was the first time that the US Justice Department had gone after an ecommerce company under the Act. Furthermore, it is the fourth-largest settlement ever under the Act.
For perspective, the case revolves around the sale of thousands of illegal pill presses and encapsulating machines that were sold on the eBay platform. While these machines are used by pharma companies and could have little use in households, some of these sold by eBay to retail consumers were “high-capacity pill presses capable of producing thousands of pills per hour.”
eBay to Pay $59 to Settle Case Related to Pill Presses
According to the Justice Department, “Pill presses and encapsulating machines can be used by criminals to manufacture illegal drugs.” It added that “pill presses are capable of producing counterfeit pills that appear indistinguishable from legitimate pharmaceutical drugs, including pills that are sometimes laced with fentanyl.”
According to Associate Attorney General Vanita Gupta, Chair of the Justice Department’s Opioid Epidemic Civil Litigation Task Force, fentanyl-laced pills are a “significant contributor to the overdose epidemic in the US.” Items like these presses were not just used to press illegal pills, they were used to represent extremely dangerous fentanyl as less potent and more predictable pharmaceuticals like hydrocodone. The DEA found that 6/10 of these fake fentanyl pills now include a lethal dose of the drug.
eBay has not admitted to any wrongdoing and instead said that it took actions to stop sales of such products. In fact, it argued that its safety measures “prevented tens of thousands of potentially problematic listings from appearing on our marketplace,” even though a large number of pill presses were regularly being sold on the platform.
The Justice Department is quite critical of eBay’s role in the case and U.S. Attorney Nikolas P. Kerest for the District of Vermont said, “Through its website, eBay made it easy for individuals across the country to obtain the type of dangerous machines that are often used to make counterfeit pills.”
Kerest added, “Our investigation revealed that some of these machines were even sold to individuals who were later convicted of drug related crimes.”
U.S. DOJ: EBAY TO PAY $59 MLN TO SETTLE ALLEGATIONS RELATED TO PILL PRESSES AND THE CONTROLLED SUBSTANCES ACT
— CGTN America (@cgtnamerica) January 31, 2024
Meanwhile, eBay has agreed to “enhance its compliance program” as part of the settlement. However, if history is any indication, the company has done little to prevent sales of illegal products on its platform.
eBay Also Accused of Selling “Rolling Coal” Devices
This scandal wasn’t eBay’s first when it came to the sale of illegal items. Far from it, in fact. One of its worst offenses was revealed last year when the Justice Department filed a lawsuit against it alleging the company allowed the sale of over 343,000 so-called “defeat devices.” These items are meant for vehicle emission controls and are in violation of the Clean Air Act, which led to much greater dangerous emissions from hundreds of thousands of vehicles.
In the Justice Department’s release, United States Attorney Breon Peace said, “eBay’s sale of emission control defeat devices, pesticides, and other unsafe products poses unacceptable risks to our communities disproportionately impacted by environmental and health hazards.”
eBay faces fines of up to $2 billion as part of the case which is quite significant, even for a company of its size.
Climate change is among the existential risks for humanity and if allegations of eBay being used to purchase defeat devices turn out to be true it would be yet another blow for the company.
eBay Sellers Also Dodged the Ban on the Sale of Firearms
To be sure, like all other legit ecommerce platforms, eBay also has a policy that restricts sales of several products like embargoed goods, firearms and accessories, military items, pesticides, adult items, and alcohol. Unlikely most other ecommerce platforms, the restrictions haven’t really helped fully curb the sales of such products.
The platform has also been previously used to sell assault rifle parts as sellers were able to exploit loopholes in the system and regulations. Some sellers would list all but one part needed to assemble a fully working gun, allowing the buyer to buy the other part from a different seller and build the illegal weapon themselves.
Even as eBay took incremental steps to strengthen compliance, the company nonetheless profited from the sales of these illegal products.
But should eBay be singled out for the sales of illegal products? Amazon has also been fined for selling illegal pesticides on the platform. The ecommerce giant last year argued in a federal appeals court that it shouldn’t be liable for illegal products imported by third-party sellers on the platform.
Ecommerce Companies Need to Stop Sales of Illegal Products
While ecommerce companies face a herculean task in figuring out illegal products among the millions – or in many cases billions of products – on their platform, their success is imperative in protecting millions of people. There’s no telling how many people died from overdoses from fentanyl pills made with those presses, for example.
Artificial intelligence (AI) poses a potential solution or may at least be able to complement existing compliance measures to spot illegal goods.
eBay has been a repeat offender and the company has been in legal crosshairs over sales of illegal products quite often. What made things worse was that some eBay executives were sentenced for the harassment of a blogger couplewho were critical of the company. Earlier this year, eBay agreed to pay a $3 million fine over the harassment and stalking of the Massachusetts couple
The employees horribly harassed the couple by sending them live spiders and cockroaches and were eventually sentenced in 2022.
As part of the settlement, eBay is required to have an independent corporate compliance monitor for a period of three years to “ensure that eBay’s senior leadership sets a tone that makes compliance with the law paramount, implements safeguards to prevent future criminal activity, and makes clear to every eBay employee that the idea of terrorizing innocent people and obstructing investigations will not be tolerated.”
Seems like a low bar, no?