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EBay sues Amazon, alleging a years-long scheme to poach sellers and dodge detection

EBay sues Amazon, alleging a years-long scheme to poach sellers and dodge detection
EBay sued Amazon on Wednesday alleging the tech giant has been poaching some of its top sellers since 2015. (Marcio Jose Sanchez / Associated Press)

Amazon.com Inc. representatives around the world have systematically set up dozens of EBay accounts and sent private messages to hundreds of top sellers — trying to poach them — and used “creative” ways to avoid detection, EBay alleges in a lawsuit.

In a complaint filed in San Jose this week, EBay Inc. accused the Seattle e-commerce giant of conducting a years-long “orchestrated, coordinated, worldwide campaign” to woo away sellers. In the process, Amazon committed fraud and unjustly enriched itself at EBay’s expense, the suit says. Amazon declined to comment.

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Amazon maintains an inventory of products, but it also relies on third-party sellers to preserve its online dominance. Last year, more than half of the products sold on Amazon.com came from private sellers, Chief Executive Jeff Bezos said in a letter to shareholders.

EBay’s business model, meanwhile, fully depends on private sellers.

Both companies block attempts by buyers and sellers to share contact information — such as email addresses and phone numbers — via their platforms’ private-message tools. Each company wants people to conduct their transaction on its online marketplace, where it can collect its fee, rather than connecting elsewhere to finish the sale and cut the company out.

Since 2015, the lawsuit alleges, Amazon representatives in the United States, Britain, France, Spain, Italy, Australia and Singapore have set up EBay accounts under false pretenses and intentionally misused and abused its private-message system.

San Jose-based EBay alleges that Amazon representatives attempted to circumvent rules against exchanging contact information by modifying formats to prevent the platform from detecting the email addresses and phone numbers.

Amazon representatives used unusual formatting to trick the system into delivering messages that contained email addresses and phone numbers, EBay alleged. For example, the suit said, they would spell out email addresses and phone numbers — “You can write me at Jdoe AT amazon DOT com. Sorry for the weird format” or “206 phone 555 number 5555 (read between the words) since EBay doesn’t allow phone numbers in these messages” — so EBay wouldn’t automatically block the message.

In similar fashion, the suit says, they tried to prevent EBay from detecting them by avoiding spelling out Amazon’s name, instead opting for variations such as “a-m-a-z-o-n,” “A.M.Z.N.” and “AMZ.”

These were not fragmented attempts by Amazon to make contact with its sellers, but rather a campaign backed by a precise strategy, the suit alleges. Messages sent by different workers sometimes had identical wording, it said. It also said Amazon workers identified themselves in many cases as part of a “hunter/recruiter team which actively searches for sellers we believe can do well on the platform.”

In the complaint, EBay alleges that Amazon sought to review and refine its approach by “spreading [the] learning to higher-ups at the company.” For example, EBay said, when a seller rejected Amazon’s offer to join the rival marketplace, the representative followed up asking for reasons the seller was not interested — “It will help me explain to my supervisor why I am closing out your file.”

In each instance, Amazon tried to move the discussion off EBay’s messaging tool to avoid being detected, according to the complaint. “Ebay does scan for key terms and they don’t exactly like us poking around,” the suit quotes one such message as saying. “Honestly the easiest way to communicate about this would be on the phone.”

EBay says it found out about the issue a few weeks ago, when one of its sellers notified the company about being approached by Amazon. The company says it sent a cease-and-desist letter to Amazon but received no response.

EBay alleges Amazon violated its user agreement policies, which prohibit sellers from exchanging contact information through the company’s internal messaging system and making offers to buy or sell items outside of EBay. The company also accused Amazon of fraud and violation of California’s Unfair Competition Law. The company is seeking punitive damages and financial relief, as well as an injunction forbidding Amazon from using EBay’s private messaging system to recruit EBay sellers.

Almost half of online retail sales in the United States go through Amazon, according to research company EMarketer. EBay has less than 7% of the nation’s e-commerce market, but it is Amazon’s closest competitor, followed by Apple and Walmart.

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