eBay Sues Amazon for Poaching Sellers

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On October 17, eBay filed a lawsuit against Amazon, accusing the company of illegally poaching sellers for its online marketplace. According to the lawsuit, Amazon has been using eBay’s messaging service to recruit sellers for its own third-party marketplace platform.

The lawsuit, filed in Santa Clara County in California and reported on by the Wall Street Journal, accuses Amazon of engaging in “a systematic, coordinated effort to infiltrate and exploit eBay’s” proprietary messaging system “to lure top eBay sellers to Amazon.” The suit characterizes the alleged scheme as “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).” An Amazon spokesperson told The Hill that the company is “conducting a thorough investigation of these allegations.”

The proprietary messaging system allows eBay sellers to communicate with customers and other sellers. EBay claims that Amazon has violated eBay’s user agreement as well as California’s Comprehensive Computer Data Access and Fraud Act. In the lawsuit, eBay asks the court to enjoin Amazon from using the messaging service to recruit customers and also seeks unspecified monetary damages.

Amazon’s business strategy increasingly relies on independent sellers conducting business through the Amazon Marketplace. Items sold by third-party sellers now make up the majority of items available for sale on the website. Amazon profits from these sales by charging sellers for a percentage of their revenue, as well as for services it provides, including warehousing, distribution, and advertising.