eBay Sues Amazon for Alleged Illegal Recruiting of Sellers

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eBay has filed a lawsuit against Amazon claiming the ecommerce giant has been using illegal tactics to lure sellers away from the rival marketplace since at least 2015. The complaint was filed today in Santa Clara County Superior Court in California.

“The scheme is startling in breadth, involving 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,” eBay said in the lawsuit.

eBay allows potential buyers and sellers to become members on its platform. They can then sell on eBay and communicate through its internal email system. It also offers sellers tools designed to increase their sales and monitor and run their online business.

Sellers must sign an eBay user agreement agreeing not to “breach or circumvent any laws, third-party rights or our systems, policies or determination of your account status… or circumvent any technical measures we use to provide the services.”

Members also agree not to “distribute to post spam” and “unsolicited or bulk electronic communications.”

According to the lawsuit, messages between an Amazon representative and an eBay seller show that Amazon knew it was breaking eBay’s rules and policies. It further alleges Amazon representatives often discussed specific policies with eBay sellers the representatives knew they were breaking.

Over the past several years, according to the lawsuit, Amazon has perpetrated a scheme to infiltrate and exploit eBay’s internal member email system.

“Since 2015, dozens of Amazon sales representatives in the U.S. and overseas set up eBay member accounts to access eBay’s “M2M” email system and used that system to solicit many hundreds of eBay sellers to sell on Amazon’s platform,” according to court documents.

These actions violated eBay’s user agreement and policies, and induced eBay sellers to do the same, the lawsuit continued, including the rule against using the internal mailing system to solicit off-platform sales.

“Such controls are critical to the success of a company like eBay that operates a virtual platform bringing buyers and sellers together,” the company said in the court documents.

An Amazon spokesperson told The Wall Street Journal that it is conducting a thorough investigation of the accusations.

eBay is also alleging that Amazon representatives opened eBay accounts they never intended to use.

“One Seattle-based Amazon representative opened three accounts in the course of a few weeks, sending solicitation emails to eBay sellers within minutes of opening each separate account,” according to the lawsuit.

eBay claims Amazon representatives would send cold-call emails to an eBay seller, introduce themselves as Amazon employees, tell them they were impressed by their business and ask them to join the rival marketplace. They allegedly explained the benefits of selling on Amazon and provided their contact information.

eBay said a whistleblower seller came forward a few weeks ago and explained how they were approached by an Amazon rep. eBay notified Amazon, asking it to cease and desist and provide more information about the alleged conduct. Amazon failed to do so, eBay stated, leading to this week’s legal action.

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