eBay settles DOJ pill press allegations for $59 million
eBay has reached a multimillion-dollar settlement with the Department of Justice (DOJ) over allegations regarding the sale of pill presses on its site.
The $59 million settlement, under which eBay admitted no wrongdoing, resolves allegations from the U.S. government that the e-commerce retailer violated the Controlled Substances Act (CSA) in connection with thousands of pill presses and encapsulating machines that were sold through its website.
The CSA regulates certain pharmaceutical manufacturing equipment, including pill presses and encapsulating machines, by requiring identity verification of purchasers, record-keeping, and reporting to the Drug Enforcement Administration (DEA).
According to the DOJ, when used with a mold, stamp, or die mimicking commonly prescribed controlled substances, pill presses are capable of producing counterfeit pills that appear indistinguishable from legitimate pharmaceutical drugs.
The U.S. alleged that eBay did not comply with these CSA requirements for thousands of pill presses and encapsulating machines that were sold through its website, including high-capacity pill presses capable of producing thousands of pills per hour.
According to the DOJ, the investigation also found that hundreds of eBay’s pill press buyers also purchased counterfeit molds, stamps, or dies, allowing them to produce pills that mimicked the products of legitimate pharmaceutical companies, and that many of eBay’s pill press buyers have been successfully prosecuted in connection with trafficking illegal counterfeit pills.
In addition to the monetary settlement, eBay also agreed to maintain and enhance its compliance program for sales of pill presses, counterfeit molds, stamps, and dies, and encapsulating machines. The settlement resolves the allegations only, and there has been no determination of liability.
“Counterfeit pills laced with fentanyl are a significant contributor to the deadly overdose epidemic," said Associate Attorney General Vanita Gupta, chair of the Justice Department's Opioid Epidemic Civil Litigation Task Force. "The department is committed to using all available enforcement measures to ensure that companies involved in selling the equipment that makes it possible to create these dangerous pills comply with the Controlled Substances Act.”
In an official statement, eBay refuted the DOJ’s claims and said the settlement does not include any admission of wrongdoing.
"While eBay acted lawfully and denies the DOJ's allegations, we determined that this agreement is in the best interest of the company and its shareholders as it avoids the costs, uncertainty and distraction associated with protracted litigation," eBay said.
"eBay's actions to remove products that could be used for counterfeit pills – including dies, molds and pill presses – prior to any request from the DOJ or other authorities, and years before the government turned its attention to these products, prevented tens of thousands of potentially problematic listings from appearing on our marketplace" said eBay. "Government officials have repeatedly commended eBay for our partnership with law enforcement and efforts to support investigations into illegal pill press usage."
eBay also recently reached an agreement with the DOJ regarding an August 2019 harassment and intimidation campaign. The e-commerce retailer agreed to pay a $3 million criminal penalty for the campaign targeting a Massachusetts couple in retaliation for their online coverage of eBay, and for its obstruction of the investigation that followed.
Since those events occurred, eBay said new leaders have joined the company and it has strengthened its policies, procedures, controls and training.