eBay Sues Amazon, Accusing it of Poaching Sellers

eBay filed a lawsuit against Amazon.com on Wednesday alleging it fraudulently poached its high-value sellers by infiltrating an internal messaging system called M2M. In the filing, eBay says its rival is "unwilling to fairly compete for third-party seller business." Amazon declined to comment on the lawsuit. eBay says the Amazon "scheme" violated its user agreement policies and "induced eBay sellers to do the same." eBay monitors the messaging system for unauthorized use and said that messages sent by a "large number" of Amazon representatives indicated that they were attempting to avoid detection.

Total Retail's Take: As online marketplaces continue to rise in popularity with consumers, the companies that operate them are in intense competition with each other to recruit more sellers to their platforms. In this case, eBay is alleging Amazon is doing so illegally. Why the unquestioned e-commerce leader, Amazon, would allegedly need to resort to such a scheme is perplexing. The breadth of Amazon's reach — nearly half of all U.S. e-commerce sales move across its platform, according to eMarketer — would seem to be reason enough for merchants to want to sell their goods on the marketplace. However, as eBay points out in its lawsuit, it's a "pure open marketplace," something Amazon can't claim. Sellers on Amazon are forced to compete, particularly on price, with the retail giant's private-label brands. That isn't the case on eBay. In the middle of all this are sellers, who are being courted by both Amazon and eBay — as this lawsuit attests to.