Once an auctioneer of rare books, Sotheby's has grown over the past 100 years to become the largest auction house on earth. With over 100 offices worldwide, annual auction revenues exceed $2 Billion. Founded in 1744 by Samuel Baker, Sotheby’s went on to broker many of the greatest collections of the Industrial Age, including Napoleon's personal library, upon his death in exile on St. Helena. The next century and a half would see Sotheby's diversify into coins and fine art. By the end of World War I, they had relocated to a fashionable New Bond Street salesroom which has served as the Sotheby's World Headquarters ever since.

Peter Wilson's impact on Sotheby's and the entire auction world can still be felt to this day. Joining Sotheby's in 1936, his work led to an unprecedented international expansion and near perfect positioning for the explosion of Impressionist and Modern Art. Most significant was the Goldschmidt auction of 1958, where 7 Impressionist and Modern pieces sold for £781,000 in twenty-one minutes. The event (the first auction held at night since the 18th century) captured worldwide attention and attracted over 1,400 art dealers, movie stars, and industrial giants such as Paul Mellon, who landed Cézanne's Garçon au Gilet Rouge with a bid of £220,000 – more than five times the previous record for an artwork at auction.

In 1963, Sotheby's secured their worldwide reputation with the purchase of America's premiere fine art auction house. Parke-Bernet, guided by its founder Louis Marion, had sold Rembrandt's Aristotle Contemplating the Bust of Homer to The Metropolitan Museum of Art in 1961 for a world record $2,300,009. That record remained for 18 years.

The 1970's was a period of much growth for Sotheby’s, including their Initial Public Offering in 1977. The uncertainty of the 1980’s allowed the auction giant to be bought by a group of investors led by A. Alfred Taubman, once again making Sotheby's a privately held company. The uncertainty felt early in the decade soon turned to unmatched prosperity, as skyrocketing prices became the trend in the late 80‘s. Record art sales brought international media coverage and a second public offering of stock. Recently, Sotheby's was the first international auction house to announce on-line auctions, partnering with Internet powerhouse Amazon.com.

Unlike its book-selling competition, Christie's Auction House specialized in fine art from its beginnings in 1766. Considered the world's first fine-art auctioneers, Christie's earned a reputation among England's Georgian society, and was patronized by the elite, the wealthy and all art dealers in the know. It also attracted artists who were allowed to show their works free of charge. Christie's went on to hold the most important art auctions of the 18th and 19th centuries. They successfully negotiated for the sale of collections owned by Catherine the Great and Sir Robert Walpole that would form the basis of the Hermitage museum.

Christie's continued to develop as the world's preeminent fine art auction house. Their operations within the art world have expanded to publishing and auction cataloging, as well as fine arts training and education. Today, Christie's employs hundreds of experts that assemble more than 800 auction catalogs, as well as authoring and lecturing on their area of expertise.

Currently, Christie's has over 120 offices worldwide with annual revenues exceeding $2 Billion. French billionaire Francois Pinault purchased the company in 1998 for $1B, ending 233 consecutive years of British ownership. Christie's now handles over 80 categories of items including wine, stamps, motorcars and other collectibles. Today, its reputation is stronger than ever, holding many world records for items at auction; the most famous of which came during perhaps the greatest art auction in history, marking the peak of the skyrocketing prices during the late 1980's. On the evening of May 15, 1990, an anonymous telephone buyer bid the staggering amount of $82.5 million for Vincent Van Gogh's Portrait of Dr. Gachet, a price unmatched to this day. The chairman of Christie's at the time (considered perhaps the greatest auctioneer in history), Christopher Burge, presided over this historic sale.

Could it be, however, that the honeymoon is now over? The current Chairman of Christie's, Sir Anthony Tennant, and A. Alfred Taubman, Sotheby's corporate savior and majority shareholder, have recently come under heavy fire for what appears to be nearly a decade of collusion, price-fixing, and the illegal exchange of information between the two auction giants. A federal investigation into violations of the Sherman Antitrust Act has been ongoing since 1997 and many heads have already seen the proverbial auction chopping block.

At the heart of the government's case are separate occasions where the two auction houses raised their commission pricing structure within weeks of each other. Responding to a global slump in auction sales, the two houses first announced that the commission paid by buyers would be raised from a flat 10% commission to an increased 15% on the first $50,000 of any sale. This price hike was followed, three years later, by Christie's announcement that they were changing their commission from a negotiable 10 percent to a more complex and non-negotiable sliding scale, ranging from 2 to 20 percent (depending on the size of the sale). Within two weeks Sotheby's did the same. Although these may seem to be insignificant percentages, when considering the large sums that auction items draw, this increased commission plan has dramatically increased the final price, especially on lower-end items (which could now have upwards of 35% total commissions tacked on).

These price hikes prompted widespread gossip within the normally tight-lipped art and auction communities, although rumors of this type of collusion were not new. If true, these crimes not only break federal antitrust law, they are also in direct violation of the European Commission, the United Kingdom's Office of Fair Trading and the Australian Competition Commission. Beyond any potential legal actions being brought against the companies or individual executives, both auction houses are facing multiple class-action lawsuits by large numbers of buyers and sellers claiming nearly a decade of financial damages due to these illegal practices. On a final note, adding salt to their wounds, Sotheby's is currently facing a variety of additional lawsuits, from violating shareholder trust and criminal negligence to grievous mismanagement.

The first to respond to these charges, Christie's signed a deal for leniency for having provided prosecutors first with evidence of such illegal dealings. With the abrupt resignation of Christie's chief executive officer, Christopher M. Davidge, reports of collusion seemed to be all but confessed. In the days to follow, extensive documentation was turned over to government prosecutors that, sources have said, supported the government’s allegations that a secret conspiracy between the two companies was taking place at the highest levels. Specifically, it was reported that Mr. Davidge had multiple meetings with Diana D. Brooks, the Chief Executive at Sotheby's (considered to be the most powerful woman in the art world), to discuss and monitor their pricing and auction schedules.

Upon further investigation by the government, and facing the potential of greater legal action against their auction house, Taubman and Brooks resigned their positions. Since her resignation Ms. Brooks and her New York-based attorney, Stephen E. Kaufman, have been in negotiations with federal prosecutors to secure her testimony against Mr. Taubman in exchange for leniency. To this point, Mr. Taubman has maintained complete innocence and has acknowledged no wrongdoing during his tenure as Sotheby's Chairman.

The already shaken confidence of the art and auction communities was further blemished when sources close to the prosecution leaked information that the auction giants shared their "grandfather" lists. These lists, consisting of the top 50 or so sellers for each company, showed specially negotiated lower commission rates (sometimes as little as 0%) that these super-elite customers would pay for selling their high-priced items. By sharing these lists the auction companies could eliminate increased competition by guaranteeing the same commission for its most exclusive clientele, while keeping smaller sellers fixed to the non-negotiable price schedule adopted in 1995.

Today, Christie's and Sotheby's control over 90% of the nearly $5 billion worldwide auction market, yet they have had their foundations rocked to the very core. Both houses are currently undergoing extensive expansion plans for up-grading their New York headquarters. While Christie's is enjoying their brand new location in Rockefeller Plaza, Sotheby's has designs to build another 6 stories atop their York Avenue North American corporate headquarters. Current expansion plans for Sotheby's, although questioned by their investment partners, are still under way. Again, adding insult to injury, Sotheby's Stock has fallen from last year's post-Amazon announcement of $47 per share, to just under $20 per share, where it has remained for a majority of this year.

In this red-hot art market, where a new crop of Internet multi-millionaires are competing with old-money collectors for a limited number of masterpieces, the current investigation has only deepened a community feeling of distrust in a market whose history is tainted by scandal.