eBay to pay $59 million to settle DOJ charges over illegal pill presses
SAN JOSE, Calif. - San Jose-headquartered commerce company eBay Inc. will pay out a $59 million settlement after the Department of Justice alleged that the company didn't do enough to stop criminals from buying devices used to manufacture counterfeit drugs.
Wednesday's settlement is the Justice Department's first with an e-commerce company for violating the federal Controlled Substances Act, which governs the manufacturing and distribution of drugs.
It arose from eBay's monitoring of thousands of pill presses and encapsulating machines sold through its website.
The Justice Department said criminals can use pill presses and encapsulating machines to illegally manufacture counterfeit pills, including fentanyl-laced pills that helped fuel the nation's opioid epidemic.
eBay was accused of failing to comply with recordkeeping and reporting requirements, including verification of purchasers' identities, to the U.S. Drug Enforcement Administration for the devices, including presses capable of producing thousands of pills an hour.
Many purchasers of the pill presses were later prosecuted for drug-related crimes, the Justice Department said.
"Fentanyl - pressed into fake pills that look like real prescription medications - is killing Americans," DEA Administrator Anne Milgram said in a statement. "EBay and other e-commerce platforms must do their part to protect the public."
This is the second large settlement that the company has been involved in this month. eBay agreed to pay a $3 million criminal penalty for alleged harassment and intimidation of a Massachusetts couple. The DOJ determined that eBay retaliated against the couple for negative online coverage of the company and tried to obstruct the following investigation.
In a press release, the company said it denies the allegations from the DOJ.
eBay plans to fund the full $59 million settlement through the company's available cash on hand. EBay did not immediately respond to a request for further comment.