EBay went public yesterday with claims that Amazon has been illegally using the ecommerce platform’s internal messaging system to woo some of its more successful merchants over to Amazon's own online agora.
“EBay sent a cease-and-desist letter to Amazon on Monday to stop the alleged recruiting practice after determining roughly 50 Amazon sales representatives worldwide 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,” the WSJ’s Laura Stevens writes in breaking the story.
“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,” Stevens continues.
Subsequently, “EBay says it found hundreds of messages in which Amazon employees sought to skirt the company’s content monitoring -- spelling out email addresses, adding extra characters to disguise the word ‘Amazon,’ and suggesting offline contact, for example,” writes CNBC’s Sara Salinas. For example, the message might refer to “a-m-a-z-o-n Australia” or “A.M.Z.N.,” Karen Weise reports for the New York Times.
That’s allegedly a violation of California’s Comprehensive Computer Data Access and Fraud Act, which “makes it a serious crime to access a computer, computer data, or a computer network without permission (and usually with an unlawful purpose),” according to the Shouse California Law Group. “Unlike with many other forms of California fraud, you can be guilty of unauthorized access to a computer even if you don't actually defraud anyone out of money or property,” it adds.
“We have uncovered an unlawful and troubling scheme on the part of Amazon to solicit eBay sellers to move to Amazon's platform,” eBay claimed in a statement yesterday, Reuters reports. “We have demanded that Amazon end its unlawful activity and we will take the appropriate steps, as needed, to protect eBay.”
An Amazon spokesman responded: “We are conducting a thorough investigation of these allegations.”
“The heated competition for third-party sellers is a product of both a general shift in retail and e-commerce and the increasing importance of catering to small and independent businesses that do a majority, if not all, of their sales online,” observes Nick Statt for The Verge. “Increasingly, consumers are purchasing items directly from sellers through marketplaces like Amazon and eBay. That’s because companies have discovered they can get off the ground more easily by launching entire ventures exclusively online,” he continues.
Meanwhile, the platforms themselves have been evolving -- and, in some ways, converging.
“Since starting out as a pioneering online auction company, eBay has moved into more traditional e-commerce sales. Today, it says 89% of goods bought on eBay are at a fixed price -- making it more of a direct competitor with Amazon and adding to concern that its rival was trying to poach top sellers,” the NYT’s Weise reports.
At the same time, “Amazon is adding to the breadth and depth of the products on its website by attracting third-party merchants. That lets Amazon tie up less of its resources in holding inventory waiting to be sold, but it also places extra pressure on the company to attract sellers that offer the merchandise that it believes customers want,” Weise adds.
“These sellers are critical to both businesses, since the companies make billions of dollars in commissions on these sales,” points out Ben Fox Rubin for CNET.
“It's not known if Amazon will fight the cease-and-desist request. However, there are high stakes for both sides. EBay is entirely reliant on third-party sellers, and could face serious trouble if enough merchants jumped ship. Amazon, meanwhile, makes more profit from third-party marketplace sales than its own thanks to both its 15% cut and fees,” writes Jon Fingas for Engadget.
“I don’t want to compete with Amazon; I want to get as far away from Amazon as I can,” Wenig said. “I want us to stand for something fundamentally different. I want eBay to be a winner in discovery-based shopping. I want it to be a place where people think of first for the things they love, not just the things they need.”
But “pressed further, Wenig admitted that as much as he doesn’t want eBay to compete with Amazon, the two e-commerce companies do often jockey for the same audiences,” Levy adds.
That would not only be buyers, it appears, but also sellers.