Price-fixing is an illegal practice in which companies conspire to charge higher prices on products such as DVDs. It involves agreements between competitors to keep prices artificially high, thus limiting competition and eliminating the possibility of price wars that could lower the cost of goods and services for consumers. Price-fixing can result in higher profit margins for the companies involved and reduce incentives for them to innovate, but it also leads to higher costs for customers who no longer have access to competitively priced goods. In recent years, there have been numerous cases of price-fixing involving DVDs, with many large companies being charged hefty fines as a result.
On Feb. 10 in U.S. District Court for the Eastern District of Tennessee, Bruce Fish of Hayfield, Minnesota, along with BDF Enterprises, Inc., a corporate entity owned by Fish, admitted to participating in a conspiracy to fix the prices of DVDs and Blu-Ray discs sold on the Amazon marketplace. Victor Btesh of Brooklyn, New York, and three New York corporate entities of which Btesh is the sole or majority owner, pleaded guilty to the same conspiracy on Feb. 9.
According to the plea agreements, Btesh and Fish, along with their four corporate entities, agreed with co-conspirators to raise and maintain the prices of DVDs and Blu-Rays sold in Amazon marketplace storefronts, resulting in those products being sold at collusive and noncompetitive prices. Amazon Marketplace is an e-commerce platform that enables third-party vendors to sell new or used products alongside Amazon’s own offerings. Amazon Marketplace is owned and operated by Amazon.com, Inc. The four corporate entities are the first corporate defendants to plead guilty and the owners are the fifth and sixth individuals in the scheme.
“As e-commerce has become a cornerstone of the economy, it is vital to protect fair and open competition in online marketplaces,” said Assistant Attorney General Jonathan Kanter of the Justice Department’s Antitrust Division. “Conspiring to fix prices, wherever that conduct may occur, harms competition. These guilty pleas demonstrate that the division remains committed to deterring, detecting, and prosecuting anticompetitive conduct across markets.”
“Cases like these demonstrate the FBI’s dedication to investigating those who look to operate outside of the law to conspire to fix prices in the consumer marketplace,” said Assistant Director Luis Quesada of the FBI’s Criminal Investigative Division. “The FBI and our law enforcement partners remain committed to protecting consumers against all forms of fraud, schemes and illegal activity, and bringing those who orchestrate these crimes to justice.”
“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. “The guilty pleas in this case represent a win for all law enforcement agencies who investigate those who engage in this type of harmful conduct to ensure that justice is served.”
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. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The Antitrust Division’s Chicago Office and the U.S. Attorney’s Office for the Eastern District of Tennessee are prosecuting the case, which was investigated with the assistance of the FBI’s New York Field Office and the USPS Office of Inspector General’s Contract Fraud Investigations Division.
Anyone with information concerning price fixing or other anticompetitive conduct related to the sale of DVDs, Blu-Rays, or products sold through Amazon Marketplace should contact the Antitrust Division’s Chicago Office at 312-984-7200, Citizen Complaint Center at 888-647-3258
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