eBay Suing Amazon Over Potential Seller Poaching

Fans of e-commerce will be concerned, or at least fascinated, to know that eBay has filed a lawsuit against online marketplace competitor Amazon.  The lawsuit, filed Wednesday in Santa Clara County, CA, alleges that Amazon has “perpetrated a scheme to infiltrate and exploit eBay’s internal member email system,” over the course of the past few years.  In other words, eBay is accusing Amazon sales representatives—both in the US and globally—of a concerted effort to recruit high-profile eBay sellers and poach them for Amazon’s marketplace.

Apparently two weeks prior to filing this lawsuit, eBay had originally sent a cease-and-desist letter to Amazon, intimating they had found evidence of this alleged effort to poach sellers for at least the last few years.

In the filing, eBay’s complaint alleges: “For years, and unbeknownst to eBay, Amazon has been engaged in a systematic, coordinated effort to infiltrate and exploit eBay’s proprietary M2M system on eBay’s platform to lure top eBay sellers to Amazon.”  Furthermore, eBay contends that Amazon coordinated this scheme directly from its headquarters.

Apparently, as the suit describes, Amazon representatives managed to avoid detection in this scheme by asking eBay sellers to communicate over the phone as well as spelling out their email addresses. And eBay may have never learned of this practice were it not for an eBay seller who alerted the online auction site. It was at this point, then, that eBay sent Amazon the cease-and-desist letter.

It is important to recall, of course, that both eBay and Amazon operate with third-party sellers, allowing them to list and to sell items on their respective online marketplace websites. These sellers are important, of course, because it helps eBay and Amazon to make billions of dollars in the form of commissions, from their sales. As a matter of fact, Amazon has reported that third-party sales account for at least half of their retail sales numbers; of course, outside sellers account for all retail sales transactions on eBay.

If a jury determines that Amazon is, in fact, guilty of what eBay alleges, they could further assess that Amazon has violated the California Comprehensive Computer Data Access and Fraud Act, which would subject them to fines, of course, and could impose new operational restrictions, in addition to paying monetary damages to eBay.