It’s no secret that Amazon’s (AMZN) growth has far outpaced eBay’s (EBAY). But now eBay claims the online giant got there by crossing a legal line: by infiltrating eBay and misappropriating its internal messaging system (known as M2M) to poach it’s sellers.
To circumvent eBay’s safeguards, the company alleges that Amazon representatives took extra measures such as spelling out email addresses and convincing eBay users to contact them over the phone. eBay described it as an “orchestrated, coordinated, worldwide campaign” to “illegally lure eBay sellers to sell on Amazon”. eBay says the Amazon “scheme” violated its user agreement policies and “induced eBay sellers to do the same.”
“Amazon’s misuse of eBay’s M2M system has been coordinated, targeted, and designed to inflict harm on eBay,” the complaint 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 claims that Amazon’s illegal activity has been going for years but that the company only uncovered these efforts recently when notified by one of it’s sellers. eBay investigated the sellers claim and found them to be true. eBay made it’s complaint public earlier this month and sent Amazon a cease-and-desist letter. Amazon has declined to comment on the lawsuit and responded only to say that it would initiate an internal investigation to look into the matter.
While neither company discloses the number of sellers on their platforms, eBay, which was founded only one year after Amazon, is significantly smaller: Last quarter, Amazon’s net revenue totaled $52.9 billion. eBay’s revenues were paltry by comparison at only $2.6 billion. In fact, 3rd party sales now account for over half the products sold on Amazon’s site. But is that growth due to the illegal activity that eBay alleges? It’s now up for the courts to decide. Regardless, will shoppers or investors even care?