“The lion's share of Amazon's revenue come from products sales, and it is constantly under pressure, and searching, to increase the number of sellers on its platform,” eBay alleges in the new lawsuit that it filed against its fellow online marketplace. That pressure for growth has spawned a plan for Amazon to lure “high value” sellers away from the eBay platform and onto Amazon, a plan that eBay alleges was not only “clandestine” in nature and sizable in scope, but also highly “illegal.”
Following reports early this month that eBay was readying to sue Amazon for allegedly poaching sellers in violation of California state law, eBay initiated litigation against its rival this week. According to eBay’s complaint, which was filed on Wednesday in a state court in Northern California, Amazon – by way of dozens of employees – has, “for years, and unbeknownst to eBay,” engaged in a “systematic, coordinated effort to infiltrate and exploit eBay’s proprietary M2M [messaging] system on eBay’s platform.”
“Amazon – unwilling to compete fairly for third party seller business – instead has resorted to an orchestrated, coordinated, worldwide campaign,” eBay alleges. In furtherance of this scheme, Amazon’s representatives allegedly “opened eBay accounts with no intent of ever using them to conduct legitimate business on eBay's platform,” and instead, created accounts for the purpose of “luring top eBay sellers to Amazon.”
eBay asserts that Amazon’s “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),” and is “part of a larger pattern of aggressive, unscrupulous conduct.”
Still yet, the complaints goes on to allege that “Amazon's scheme violated eBay's User Agreement and policies,” and the $1 trillion e-commerce giant “induced eBay sellers to do the same,” which gives rise to actionable claims under California state law.
eBay notified Amazon of its allegations in a cease and desist letter early this month, and claims that its counsel “asked Amazon to cease and desist from such activity, and asked Amazon to provide additional information about the conduct." However, Amazon failed to stop and did not provide the requested information, thereby prompting eBay to file suit.
As a result, eBay cites claims of intentional interference with contractual relations and prospective economic relations, fraud ("The conduct of Amazon and its reps was fraudulent, malicious, oppressive, and in willful disregard of eBay's rights.”), and violations of the California state penal code, and is seeking both monetary damages and injunctive relief, the latter of which would require Amazon to immediately and permanently cease all misuse of eBay’s internal messaging system or the eBay platform, more generally, to solicit eBay member-sellers.
*The case is eBay, Inc., v. Amazon.com, Inc., and Does 1-25, 18-cv-336315 (Sup. Ct. of Santa Clara).