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EBay Sues Amazon For Allegedly Poaching Sellers

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eBay Inc. (EBAY) has filed a lawsuit against Amazon.com Inc. (AMZN), accusing its e-commerce rival of illegally poaching sellers on its marketplace by infiltrating eBay's internal messaging system.

The lawsuit filed by eBay on Wednesday 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 several years.

eBay alleges that Amazon launched the alleged scheme to recruit high-value eBay sellers to its own site, adding that the "breadth and scope of Amazon's conduct is startling."

Since 2015, dozens of Amazon sales representatives in the U.S. and abroad set up eBay member accounts to access eBay's M2M email system and used that system to solicit many hundreds of eBay sellers to sell on Amazon's platform, the lawsuit said.

M2M is eBay's member-to-member contact system, which allows sellers to communicate with each other, their customers, and eBay.
"Amazon's misuse of eBay's M2M system has been coordinated, targeted, and designed to inflict harm on eBay. Indeed, one of 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 said in the lawsuit.

eBay said that many Amazon representatives used to send solicitation emails to eBay sellers within minutes of opening their eBay accounts. Some other Amazon representatives never used their eBay accounts to buy or sell, but instead, only to try to lure sellers off the eBay platform.

Although the campaign had been underway for years, eBay uncovered evidence of it only recently. Two weeks ago, eBay sent a cease-and-desist letter to Amazon.

Both Amazon and eBay allow third-party sellers to list and sell items on their sites. Third-party sellers account for more than half of Amazon's retail sales.

For fiscal 2017, eBay had reported a 7 percent increase in revenues to $9.6 billion. In contrast, Amazon reported a 31 percent surge in net sales to $177.9 billion.

eBay is seeking monetary damages to be determined by a jury trial.

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