EBay Sues Amazon Workers Over Claims of Seller Poaching
August 01 2019 - 3:07PM
Dow Jones News
By Sarah E. Needleman
EBay Inc. is suing three Amazon.com Inc. employees who it claims
worked to illegally recruit its third-party sellers, the latest
twist in a nearly yearlong tussle between the e-commerce
competitors.
The lawsuit, filed Wednesday in a San Jose, Calif., federal
court, accuses the trio of violating federal racketeering laws and
claims they knowingly harmed eBay to bolster profits for their
employer and themselves. An Amazon spokeswoman declined to comment
on the latest suit.
EBay first raised the allegations in October in a
cease-and-desist letter it sent to Amazon saying the Seattle firm
had contacted EBay sellers on a platform used by many to
communicate, and attempted to persuade them to leave the
marketplace. The letter claimed that roughly 50 Amazon sales
representatives world-wide had sent more than 1,000 messages to
sellers on its platform.
Lacking a response from Amazon, eBay then filed suit against the
company over the matter about two weeks later. That case is now in
arbitration.
David Grable, an attorney for eBay, said Thursday that the
company brought its suit in part because a person with firsthand
knowledge of the alleged scheme came forward with new
information.
EBay's new lawsuit targets Amazon managers it believes to have
helped coordinate the alleged scheme. According to the complaint,
the defendants and other Amazon employees directed dozens of sales
representatives in the U.S. and overseas to set up eBay member
accounts to access the platform's internal messaging system to
recruit sellers.
The alleged maneuver violated eBay's user agreement and
policies, and induced eBay sellers to do the same, the lawsuit
says. Amazon representatives, in communication in sellers, worked
to avoid detection by providing unconventional phone-number formats
and suggesting that merchants write those numbers down and then
delete the messages.
EBay and Amazon have been rivals for years, as both rely on
independent merchants to stock their virtual shelves with consumer
goods. EBay doesn't sell its own merchandise, while Amazon does. In
April, Amazon Chief Executive Jeff Bezos said 58% of items sold
through the company's platforms are from third-party sellers.
Amazon has faced intense scrutiny in Washington alongside
several other tech giants over their size and business practices.
The Justice Department said last month that it was opening a broad
antitrust review into whether the companies, which also include
Facebook Inc., Apple Inc. and Alphabet Inc.'s Google, are
unlawfully stifling competition.
Amazon is also subject to a European Union antitrust
investigation into its treatment of its merchants. The European
Commission, the EU's top antitrust enforcer, said in July that its
investigation would examine whether Amazon is abusing its dual role
as a seller of its own products and a marketplace operator.
The latest eBay lawsuit also accuses the defendants of providing
quotas for Amazon representatives to recruit eBay sellers who could
supply trending items or amplify the company's product
offerings.
"I work directly for Amazon and our Shoes and Softlines
department is still looking for great sellers like yourself to help
'fill in the gaps' in our 3P marketplace," one Amazon
representative wrote, according to the complaint.
"Because of the email moderators on here, would you be willing
to speak on the phone tomorrow," the complaint says a different
representative wrote.
Write to Sarah E. Needleman at sarah.needleman@wsj.com
(END) Dow Jones Newswires
August 01, 2019 14:52 ET (18:52 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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