Antitrust Law Daily Antitrust Division charges individual with rigging online government surplus auctions
Thursday, March 7, 2019

Antitrust Division charges individual with rigging online government surplus auctions

By Peter Reap, J.D., LL.M.

The government alleges that Marshall Holland restrained trade in violation of the Sherman Act by fixing prices, rigging bids, and allocating markets for lots offered on GSAAuctions website.

In an Information filed in the federal district court in Minneapolis, the Justice Department’s Antitrust Division charged Marshall Holland with engaging in a combination and conspiracy with uncharged co-conspirators to suppress and eliminate competition by fixing prices, rigging bids, and allocating markets for lots of surplus government property, in particular computers, that were offered for sale on the GSAAuctions website. The government contends that these actions were in unreasonable restraint of trade in violation of Section 1 of the Sherman Act (U.S. v. Holland, Case No. 0:19-cr-00065-MJD).

According to the government, Holland and his co-conspirators suppressed and eliminated competition by agreeing on which co-conspirator would be designated to win a certain lot offered for sale by GSAAuctions and then submitting bids for that lot. GSAAuctions is an electronic system operated by the federal government’s General Services Administration. GSAAuctions offers a variety of federal assets for sale by electronic bidding to the general public, including surplus property that is no longer needed by government agencies.

During the period covered by the Information, the assets listed for sale by GSAAuctions were identified and available for sale by a sale-lot number. Each lot described the asset(s), its location, and precise time that the auction would close. The GSAAuctions website only identified bidders by generic identifiers, such as "Bidder #1." The user name of each bidder was hidden and not available for viewing by the general public either during or after the auction.

As part of carrying out this combination and conspiracy, Holland and his co-conspirators:

  • Communicated with each other via phone, text message, and email before and during GSAAuctions;
  • Agreed not to compete with each other when bidding on GSAAuctions lots;
  • Agreed and designated which co-conspirators would bid on a particular lot;
  • Agreed and designated which co-conspirator would win a particular lot; and
  • Submitted payment to GSAAuctions for lots that were won at collusive and noncompetitive prices.

During the relevant period, Holland and his entity, referred to only as Company A and not identified in the charges, were registered to bid at GSAAuctions and submitted bids to its website in order to purchase computers, the Information contends.

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