eBay, Inc. fell 11 3/16 to 195 15/16 in early trading Friday after the online auctioneer disclosed that it had been subpoenaed in a U.S. government price-fixing investigation. The company also revealed that it has been contacted from time to time by “various federal, state and local regulatory agencies” about how it protects buyers from fraud, and warned that it may receive more such requests in the future.
On March 24th, the Justice Department asked for information about eBay’s Butterfield’s unit, the company said in a filing with the Securities and Exchange Commission. “The company believes this request may be related to a publicly reported criminal investigation of auction houses for price fixing,” the filing said. The Justice Department is looking into possible price-fixing involving auctions conducted through Sotheby’s Holdings, Inc. and Christie’s International Plc.
If the investigation leads to criminal charges, the company said, its business would be hurt by the negative publicity — regardless of the outcome. “Even the process of providing records and information can be expensive (and) time-consuming and result in the diversion of management attention,” eBay said in the filing.