EBay Sues Amazon Employees for Alleged 'Racketeering Scheme'

EBay sued three employees working at e-commerce rival Amazon, alleging that they conspired with dozens of other workers to fraudulently take high-value online merchants from eBay.

Amazon managers, as part of a “racketeering scheme,” offered incentives for employees to illegally infiltrate eBay’s internal messaging system, create fake eBay accounts, and recruit merchants who were using the company’s marketplace, according to the complaint filed Wednesday in U.S. District Court in San Jose, Calif. EBay is based in San Jose.

EBay in October filed a lawsuit in California state court making similar allegations against Amazon. The dispute is in arbitration. The new federal lawsuit contains more details about the scope of the alleged scheme. EBay said the Amazon managers trained employees how to create fake eBay accounts, told them which merchants to target, and taught them how to spell out external emails in a manner to elude detection.

The Amazon managers targeted by the lawsuit are Sonja Boch, Amanda Sullivan Hedger, and Ernest Arambula, all residents of the Seattle region, according to the lawsuit. An Amazon spokeswoman declined to comment on the lawsuit. The employees couldn’t be reached for comment.

The allegations could intensify scrutiny on Amazon by lawmakers and regulators in the U.S. who are looking at antitrust issues. One of Amazon’s key defenses has been that it operates in a competitive retail market and online merchants have many options for where to sell their goods, including eBay, where shoppers around the world spend about $100 billion a year.