By Dean Seal


EBay will pay $59 million to settle the federal government's allegations that thousands of pill presses and encapsulating machines were sold on its popular online marketplace.

The U.S. Justice Department said Wednesday that eBay has also agreed to enhance its compliance program in order to resolve claims that the pill-press and encapsulating-machine sales on its platform violated the Controlled Substances Act.

The government claims that hundreds of pill-press buyers on eBay also purchased counterfeit molds, stamps or dies needed to produce pills that mimic the products of legitimate pharmaceutical companies. Many of those buyers have since been prosecuted in connection with trafficking illegal counterfeit pills, the DOJ said.

According to the settlement agreement, eBay denies the federal government's contention that it is subject to the Controlled Substances Act and doesn't admit liability in connection with the allegations.

The company said in a statement that it worked to remove products that could be used for counterfeit pills before the DOJ reached out and "years before the government turned its attention to these products."

"Government officials have repeatedly commended eBay for our partnership with law enforcement and efforts to support investigations into illegal pill press usage," the company said.

Nonetheless, the settlement is in the best interest of shareholders and would avoid the costs, uncertainty and distraction of litigation, eBay said.

The DOJ is calling the agreement its fourth-largest Controlled Substances Act settlement ever and its first with an e-commerce company.


Write to Dean Seal at dean.seal@wsj.com


(END) Dow Jones Newswires

01-31-24 1318ET