Ebay sues Amazon, accusing rival of illegally poaching customers

Auction site says Amazon accessed internal email system for members in order to persuade them to switch

Ben Chapman
Thursday 18 October 2018 10:55
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Amazon’s fleet of automated warehouse robots

Ebay is suing Amazon, accusing its rival of illegally poaching its sellers by accessing an internal email system.

Amazon has for the last few years “perpetrated a scheme to infiltrate and exploit eBay’s internal member email system”, the online auction site claimed in a California lawsuit.

It said Amazon's practices “appear to be part of a larger pattern of aggressive, unscrupulous conduct”.

The legal action marks an escalation in a spat between two of the most prominent US technology giants and comes after eBay sent Amazon a letter earlier this month demanding an end to the alleged conduct.

In the letter, eBay warned it would take “appropriate steps” to protect itself. Amazon responded stating that it had started a “thorough investigation” of the claims.

Ebay accuses its competitor of “repeatedly” contacting companies and individuals trading on the auction site to persuade them to start selling on Amazon’s marketplace instead.

Around 50 staff at Jeff Bezos’s Seattle-based company sent more than 1,000 messages to eBay sellers via an internal messaging system called M2M, an investigation by the auction site revealed.

“Amazon's misuse of eBay's M2M system has been coordinated, targeted, and designed to inflict harm on eBay,” the complaint filed in Santa Clara reads.

“Indeed, one of the Amazon sales representatives who participated in this scheme described the team he worked on as a 'hunter/recruiter team which actively searches for sellers we believe can do well on the [Amazon] platform.'”

Ebay said Amazon had been using the tactics for years but it only discovered them a few weeks ago when a seller contacted company representatives.

The alleged tactics breach eBay's membership terms and could also contravene Californian laws on reasonable access to computer systems. Ebay is seeking financial damages.

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The two companies have been rivals in the online retail business since the industry’s early days but Amazon has pulled away from eBay in recent years.

Amazon briefly exceeded a stock market valuation of $1 trillion last month after it reported record $52bn (£40bn) sales for the quarter while eBay’s latest three-monthly revenues were a relatively paltry $2.6bn (£2bn).

The larger company has increasingly tried to muscle in on eBay’s territory by expanding its marketplace of third-party sellers, which now accounts for more than half of sales.

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