Stock Markets

EBay.com Inc. filed a lawsuit against Amazon.com Inc. AMZN 0.65% accusing the company of illegally poaching sellers on its marketplace via eBay ’s internal messaging system.

StockMarketNews.Today - The lawsuit, filed in Santa Clara County in California, accuses Amazon of having “perpetrated a scheme to infiltrate and exploit eBay’s internal member email system” over the past few years. The alleged scheme was used by dozens of Amazon sales representatives in the U.S. and abroad to recruit high-value eBay sellers to Amazon, the lawsuit said.

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“For years, and unbeknownst to eBay, Amazon has been engaged in a systematic, coordinated effort to infiltrate and exploit eBay’s proprietary M2M system on eBay’s platform to lure top eBay sellers to Amazon,” eBay alleges in the lawsuit. “The scheme is startling in breadth—involving large numbers of Amazon representatives (“Amazon reps”), targeting many hundreds of eBay sellers, and spanning several countries overseas and many states in the United States (including California).”

In the complaint, eBay cites alleged evidence “that Amazon coordinated this scheme from its headquarters,” including that many of the messages sent to its sellers followed similar patterns or were even identical. Many of the accounts used to send the messages were accessed from devices linked to Amazon internet protocol addresses, the lawsuit adds.

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Three accounts created by one individual sent more than 120 solicitation messages to sellers without conducting any actual business on the platform, eBay alleges. Amazon representatives also acknowledged they were breaking eBay’s rules, the lawsuit says.

Amazon representatives from the U.S., U.K., France, Spain, Italy, Australia and Singapore engaged in these types of methods, eBay alleges. And some of it succeeded, the company adds, saying that representatives discussed their successes with sellers. EBay asked in the claim to permanently enjoin Amazon from misusing its messaging system and for monetary relief in the form of unspecified damages.

EBay’s lawsuit accuses Amazon of intentional interference with contractual relations and economic relations, as well as fraud and violation of the California penal and business and professions codes. Amazon and eBay have been competing for both sellers and consumers for years. Both companies heavily rely on independent merchants to sell items on their sites. EBay is wholly reliant on such sellers to sell on its marketplace, while Amazon uses a hybrid model as a retailer with a platform for independent sellers, too.

Still, Amazon as of late has relied more heavily on independent merchants to fuel its sales. Typically, those transactions are more profitable because Amazon takes a cut of the revenue and charges for warehousing, advertising and other fees. More than 50% of all items sold on its site are now provided by outside sellers.

Amazon has proved a dominant e-commerce competitor, nabbing roughly 50% of U.S. online sales. But eBay has been working to catch up in recent years, making its website easier to navigate and highlighting that more than 80% of products for sale there are new. Many merchants sell on both sites, but some focus their business on one or the other.

EBay’s internal messaging system allows sellers to communicate with one another, with the company and with customers. The company’s user agreement prohibits its use for trading outside contact information, spamming and promoting sales outside eBay.

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