E-commerce heavyweight eBay is suing rival Amazon, alleging that managers at the Seattle tech giant conspired to poach e-commerce sellers through eBay’s own messaging platform.
This is the second lawsuit eBay has filed against Amazon in the last year over alleged seller poaching. The previous suit, which was filed in October and has since been moved to arbitration, contained similar allegations. However, the previous lawsuit only named Amazon as a defendant. The new suit names three Amazon managers, accusing them of participating in a scheme to train and encourage dozens of the company’s sales reps to poach eBay sellers.
“Amazon managers and others at Amazon directed dozens of Amazon sales representatives in the U.S. and overseas to set up and use eBay member accounts to access eBay’s “M2M” email system to solicit many hundreds of eBay sellers to sell on Amazon’s platform,” according to the new lawsuit, filed Wednesday in the Northern District of California.
Amazon declined to comment on the lawsuit.
Amazon reps allegedly went to great lengths to skirt eBay policies on the messaging platform, a sign that the tech giant knew what it was doing was wrong, according to the suit.
The Defendants and other Amazon managers, as well as the representatives they directed, knew that the scheme was wrong, as evidenced by systematic efforts used to avoid detection. eBay, like many websites, has automated programs designed to detect and prevent unauthorized use of its M2M system. The Defendants and other Amazon managers trained sales representatives about eBay detection techniques and how to avoid them, and Amazon representatives were diligent students, observing that (in the words of one such representative) “eBay monitors their messages pretty well for contact info,” that “eBay doesn’t allow phone numbers in these messages,” and that “ebay will not allow the exchange of email addresses in these messages[.]”
Based on training provided by the Defendants and other Amazon managers, the sales representatives used various anti-detection techniques. The representatives changed the presentation of Amazon email addresses, for example: “You can write me at jdoe AT amazon DOT com,” “DoeJohn at Amazon dot com,” and “JDoe at amazon dot com.” 2 They also provided unconventional phone number formats, again, solely for the purpose of evading detection – telling eBay sellers, for example, that “you can write down 2.0.6. – 5.5.5. – 126.96.36.199. and then delete this message if you so choose.”
In the lawsuit, eBay accuses the Amazon managers of racketeering, fraud, interfering in contractual relations and more. The suit is asking a federal judge to bar Amazon from poaching eBay sellers and for damages.
The situation first came to light last year after an eBay seller came forward to report alleged poaching efforts by Amazon. eBay then reportedly sent a cease-and-desist letter to the tech giant, demanding Amazon knock off its alleged seller poaching efforts.
At the time, Amazon said in a statement “we are conducting a thorough investigation of these allegations.”
Amazon and eBay are both major players in the e-commerce industry. Though the tech giants differ slightly — Amazon directly sells products, while eBay does not — they both run huge marketplace businesses that rely on third-party sellers.
eBay CEO Devin Wenig said at the 2018 GeekWire Summit he doesn’t want to compete with Amazon directly, though he acknowledged the companies do often jockey for buyers and sellers on their platform. The e-commerce world is big enough for a number of players, including both Amazon and eBay, and Wenig wants his company to develop its own identity.
“I don’t want to compete with Amazon; I want to get as far away from Amazon as I can,” Wenig said last year. “I want us to stand for something fundamentally different. I want eBay to be a winner in discovery-based shopping. I want it to be a place where people think of first for the things they love, not just the things they need.”
Here is the full suit: