WASHINGTON — Online auction giant eBay said its brick-and-mortar auction unit, Butterfield & Butterfield, has received a grand jury subpoena from the U.S. Justice Department antitrust division seeking documents about its practices.
The subpoena, received March 24, seeks documents about “seller’s commissions and buyer’s premiums and discussions, agreements or understandings with other auction houses in each case since 1992,” according to eBay’s annual report filed with the Securities and Exchange Commission on Thursday.
Shares in the company fell as much as 12 percent in Friday morning trading on Nasdaq before paring some of the losses to be down 19-7/8 to 187-1/4.
eBay said it believed the investigation into the fourth-largest fine art auctioneer Butterfield may be related to a Justice Department probe into possible price-fixing at major auction houses, including Sotheby’s Holdings and Christie’s International.
Sotheby’s and Christie’s control approximately 95 percent of the world’s US$4 billion auction business.
EBay said if any of the investigations lead to criminal or civil charges against the San Jose, California-based company, it could be harmed by bad publicity and litigation costs, among other things.
“Even the process of providing records and information can be expensive, time consuming, and result in the diversion of management attention,” eBay’s annual report said.
The company also said in the filing it had recently provided information to the Justice Department’s antitrust division on its conduct with respect to “auction aggregators,” including its licensing program and its lawsuit against Bidder’s Edge.
EBay sued Bidder’s Edge on December 10 for alleged trespass, unfair competition, violation of the computer fraud and abuse act, misappropriation, false advertising, and trademark dilution, among other things.
Bidder’s Edge has countersued, accusing eBay of violating antitrust laws by monopolizing or attempting to monopolize the market and that the company interfered with Bidder’s Edge contract with eBay magazine, among other charges.
Separately, the online auction firm said government regulators had received many consumer complaints about its website, and that it had been contacted periodically by federal, state, and local regulators asking questions about eBay’s ability to protect its users from fraud.
EBay said it had provided information about the company and transactions to the City of New York Department of Consumer Affairs, which submitted requests for information in the process of investigating complaints.
“The company is likely to receive additional inquiries from regulatory agencies in the future, which may lead to action against the company,” eBay said in the annual report.
