EBay sent a cease-and-desist letter to Amazon on Monday to stop the alleged recruiting practice after determining roughly 50 Amazon sales representatives world-wide sent more than 1,000 messages to sellers on its platform, according to the letter, which was viewed by The Wall Street Journal, and a person familiar with the investigation.
EBay investigated the matter after a seller alerted the company about 10 days ago of someone using the messaging system on eBay’s site to convince this seller to move to Amazon, the person said.
In the cease-and-desist letter, eBay claims Amazon has violated California’s Comprehensive Computer Data Access and Fraud Act, a law covering computer crime, in addition to its own user agreement.
“We can confirm that we have uncovered an unlawful and troubling scheme on the part of Amazon to solicit eBay sellers to move to Amazon’s platform,” an eBay spokesman said in a statement. “We have demanded that Amazon end its unlawful activity and will take the appropriate steps, as needed, to protect eBay.”
An Amazon spokeswoman said they are investigating the allegations.
EBay and Amazon have been locked in competition for years, in part because both companies heavily rely on independent merchants who sell items on their sites. EBay is a pure marketplace and doesn’t sell its own merchandise, while Amazon’s units sold are split down the middle between its own retail arm and its merchants.
Amazon in recent years has relied more heavily on its independent marketplace to grow sales because those transactions are usually more profitable. Amazon typically takes a cut of roughly 15% of each sale, plus collects advertising, warehousing and other fees from the merchants.
While Amazon has taken a dominant position in online retail, commanding nearly half of all U.S. sales, eBay has worked in recent years to modernize and shed its reputation as an online garage sale. It has recently added to its sales and customer base in part due to new, aggressive marketing campaigns and commitments that allow it to better compete with Amazon, like free, fast shipping.
Many merchants already sell on both sites, but others have chosen to focus their business on one or the other.
That’s where eBay’s internal messaging system comes in. EBay’s system allows sellers to communicate with the company, one another and customers. To use it, a seller must set up an account.
EBay’s user agreement specifically prohibits using its messaging platform for trading outside contact information, spamming and promoting sales outside eBay’s platform.
To avoid detection, the cease-and-desist letter alleges, messages sent by Amazon sales reps stayed generic and frequently used hyphens or periods between letters to describe the rival company, including a-m-a-z-o-n or A.M.Z.N. They also spelled out email addresses and phone numbers to avoid automated detection meant to prevent sharing contact information, eBay claims in the letter said.
The messages, which the eBay letter claims stemmed from Amazon sales reps around the globe, typically suggested talking on the phone or taking the conversation off eBay’s platform. In some cases when a seller said they felt uncomfortable with the outreach, the reps assured those sellers they’d engaged in similar behavior many times before, the letter said.