EBay sent a cease and desist letter to Amazon on Monday, accusing Amazon salespeople of attempting to poach eBay's top sellers using eBay's own messaging system to reach them. EBay says this not only violates its own terms of service, but also California law. Amazon says it is investigating these claims.

EBay told The Wall Street Journal that one of its sellers contacted the company about ten days ago, to alert the company that Amazon salespeople used eBay's "Contact the Seller" feature to send messages inviting the seller to sell on Amazon instead. EBay conducted an investigation, and says it found that 50 Amazon salespeople had sent about 1,000 messages to eBay sellers, recruiting them for Amazon. The messages were sent from several different countries, including the United States and the U.K., eBay said.

Needless to say, sending such messages is a violation of eBay's terms of service, as is encouraging a seller or customer to use eBay's messaging system to conduct transactions that don't go through eBay. The Amazon salespeople seemed well aware of this--they used a variety of tricks to fool eBay algorithms designed to flag such messages, writing "a-m-a-z-o-n" or "A.M.Z.N." According to The New York Times, one such message said, "EBay does scan for key terms and they don't exactly like us poking around." The salesperson added: "Honestly the easiest way to communicate about this would be on the phone."

In its cease and desist-letter, eBay says that Amazon's salespeople's poaching messages not only violate its terms of service but also California's Comprehensive Computer Data Access and Fraud Act, which makes it illegal to misuse private computer systems. "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. We have demanded that Amazon end its unlawful activity and will take the appropriate steps, as needed, to protect eBay," the company said in a statement.

For its part, an Amazon spokesperson sent Inc.com the following statement: "We are conducting a thorough investigation of these allegations."

On a collision course?

For regular online shoppers, it's been hard not to notice that eBay and Amazon's business models have been gradually converging over the past few years. Amazon started out as an online retailer selling its own inventory of items, but for the past several years has been offering items sold by third-party merchants on its site. That approach has many advantages for Amazon: It allows the company to offer a much wider choice of products, and saves Amazon the expense of maintaining them all in its own inventory. Amazon not only charges sellers a fee for all these transactions, but also sells them advertising and other services, such as fulfillment. In 2017, for the first time, more than half the items sold on Amazon were from third-party sellers.

EBay, on the other hand, started life as a peer-to-peer online auction site, and something of a virtual flea market. But it has evolved into more and more of a straight online retailer. The company says 89 percent of its goods are now sold at a fixed "Buy It Now" price rather than by bidding. And more and more of them are being sold by manufacturers. Today, when you open the eBay home page, it announces: "If They've Just Released It, It's Right Here," accompanied by pictures of such items as the latest iPhones and Apple Watches. 

Of course, lots of online shoppers buy on both sites, and lots of online sellers sell on both sites, though many choose one or the other. Amazon has a hard-driving and competitive culture, so it's easy enough to imagine salespeople taking the initiative to poach sellers from other sites even if the company never instructed them to do so, as presumably it didn't.

As for eBay, on the same day the story about its cease and desist letter broke, the company's CEO Devin Wenig was being interviewed onstage at the 2018 GeekWire Summit in Seattle. Ironically, he spent some of that time explaining he didn't want to compete with Amazon. "I want to get as far away from Amazon as I can," he said. "I want us to stand for something fundamentally different. I want eBay to be a winner in discovery-based shopping." 

When pressed, Wenig admitted that, sure, the two companies do indeed compete for both shoppers and sellers. "Saying that I don't want to compete doesn't mean that it doesn't happen in the real world," he explained. "I want to build a differentiated proposition for buyers and sellers. I don't want us to be analogs of each other, I want eBay to be something different." Maybe so. But apparently at least some of the people who work for Amazon do want to compete with eBay.

Published on: Oct 4, 2018
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