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eBay Sues Amazon for Illegal Seller Poaching

October 30, 2018

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Online marketplace eBay has filed a complaint in California Superior Court alleging that Amazon “perpetuated a scheme to infiltrate and exploit eBay’s internal member email system” in order to “recruit high-value eBay sellers to Amazon.” eBay is demanding a jury trial for the suit.

eBay is suing on the grounds of “intentional interference with contractual relations and economic relations, and fraud and violation of the California penal and business and professions codes.” according to a Wall Street Journal report. This act of poaching allegedly violates California’s Comprehensive Computer Data Access and Fraud Act.

eBay alleges that since 2015, Amazon representatives have established eBay seller accounts for the sole purpose of recruitment of eBay’s sellers to Amazon’s own marketplace. “The breadth and scope of Amazon’s conduct is startling,” eBay attorneys said in the complaint.

Amazon used eBay’s internal messaging system, whose purpose is to facilitate communication between eBay merchants and customers — to poach successful sellers and bring them over to Amazon.  According to the accusation, about 50 Amazon sales agents sent 1,000-plus messages through eBay’s system to lure sellers to its platform. The behavior violates its policies, which “prohibit eBay members from using the M2M system to solicit people to sell off the platform.” Its rules also bar members from exchanging personal information, such as phone numbers, over the platform.

The scheme occurred both internationally and within the U.S. Many of the poachers use boilerplate language from one solicitation to another and have even discussed their activities within the platform itself.

Some of the sellers didn’t even bother selling through eBay at any point, according to the complaint, with a few working to lure fellow eBay members to Amazon within five minutes of their first log-in. Some used multiple accounts and made an effort to avoid detection by eBay, according to the complaint. “Amazon and its representatives knew that its scheme was wrong, as evidenced by the representatives’ systematic efforts to avoid detection,” eBay wrote in the filing.

The activity violates the user agreement that those would-be sellers agreed to, eBay said. And it caused harm because it worked in many cases. The effort involved “large numbers of Amazon representatives, targeting many hundreds of eBay sellers, and spanning several countries overseas and many states in the United States (including California),” according to the filing.

eBay sent Amazon a Cease and Desist letter on October 1, but the suit alleges that the poaching is still ongoing.

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