Here's how eBay alleges Amazon illegally lured its 'high-value' sellers

EBay (EBAY) claims online retail giant Amazon (AMZN) deployed an illegal scheme to recruit eBay’s “high-value” sellers to Amazon, in a California lawsuit filed Wednesday in a Silicon Valley court.

The lawsuit alleges Amazon representatives made fraudulent contact with eBay sellers, in the U.S. and overseas, through eBay’s proprietary member-to-member messaging system M2M.

According to the complaint, eBay claims Amazon representatives set up eBay member accounts with intent to circumvent eBay’s message monitoring systems, using unconventional formats for email addresses and phone numbers.

“[Amazon representatives] changed the presentation of Amazon email addresses, for example…jdoe AT amazon DOT com. They also provided unconventional phone number formats solely for the purpose of evading detection — telling eBay sellers, for example, ‘you can write down 2.0.6. — 5.5.5. — 5.5.5.5. and then delete this message if you so choose.'”

EBay claims some of the Amazon representatives who made contact with eBay sellers referred to themselves as “hunter/recruiters.”

The messaging system allows eBay’s buyers and sellers to communicate electronically, though the company’s User Agreement policy prohibits the parties from using the system to offer, reference, or request contact information. It further prohibits buyers and sellers from contact concerning buying or selling outside of eBay.

Offers to buy or sell outside of its platform, eBay says, present risk of fraud, and can signal an attempt to avoid eBay fees.

Amazon’s user policies are similar, and require those who establish Amazon accounts to follow its rules.

“Any attempt to circumvent the established Amazon sales process or to divert Amazon users to another website or sales process is prohibited,” its policy states.

EBay, in its five-count complaint, alleges that Amazon intentionally interfered with eBay’s contractual and economic relations, perpetuated fraudulent activity on the company, and violated California’s Penal Code and Business and Professions Code. The online marketplace says that two weeks before filing the lawsuit it sent Amazon a cease and desist letter.

The company is asking for a jury trial and demanding a stop to the allegedly fraudulent activity, along with monetary and punitive damages.

Amazon declined to comment for this story.

Read the full complaint here:

eBay sues Amazon by Erin Fuchs on Scribd