eBay hit with antitrust suit over hiring practices

No-poaching pact with Intuit a no-no


The US Department of Justice and the State of California both filed suit against eBay on Friday, alleging that the online marketplace entered into an illegal, anticompetitive hiring pact with tax and financial software maker Intuit.

As reported by Bloomberg, the lawsuit charges eBay with developing an "evolving handshake" arrangement with Intuit from 2006 to 2009, in which each company agreed not to recruit or hire the other's employees.

"eBay's agreement with Intuit hurt employees by lowering the salaries and benefits they might have received and deprived them of better job opportunities at the other company," the Justice Department said in a statement. "The Antitrust Division has consistently taken the position that these kinds of agreements are per se unlawful under the antitrust laws."  

If this sounds familiar, it should. The case is an extension of an earlier, industry-spanning Justice Department investigation, in which multiple Silicon Valley companies were found to have struck similar "no-poaching" agreements.

In September 2010, the government reached a settlement with Adobe, Apple, Google, Intel, Intuit, and Pixar, in which all six companies agreed not to make any further such hiring pacts. At the time, however, the DoJ warned that its probe wasn't over, and now it appears to have eBay in its sights.

In fact, the claim against eBay may actually be more serious than those resolved in the 2010 settlement. In the earlier case, the companies involved were found to have agreed not to actively recruit employees from each other's staffs. The new complaint alleges that Intuit actually backed away from hiring an eBay employee whom it had previously recruited, at the personal request of eBay's then-CEO, Meg Whitman.

Intuit was not named as a defendant on Friday, however, because the DoJ considers the terms of its 2010 settlement to be sufficient to prevent any further wrongdoing.

For its part, eBay denies the DoJ's allegations, claiming that the government is using "the wrong standard" to determine the legality of recruitment agreements between companies.

"We compete openly for talent in a broad, diverse global market across a range of industries and professional disciplines, and eBay's hiring practices conform to the standards that the Department of Justice has approved in resolving cases against other companies," a company rep told Bloomberg.

The DoJ obviously disagrees, and in a separate statement, California Attorney General Kamala Harris pointed out that the state's own unfair competition laws are actually stricter than the federal government's.

Harris and the DoJ are both seeking an injunction to prevent eBay from entering into any further no-poaching agreements, in addition to damages. Both complaints were filed in the United States District Court for the Northern District of California, San Jose, and no trial date has yet been set. ®


Other stories you might like

  • Google has more reasons why it doesn't like antitrust law that affects Google
    It'll ruin Gmail, claims web ads giant

    Google has a fresh list of reasons why it opposes tech antitrust legislation making its way through Congress but, like others who've expressed discontent, the ad giant's complaints leave out mention of portions of the proposed law that address said gripes.

    The law bill in question is S.2992, the Senate version of the American Innovation and Choice Online Act (AICOA), which is closer than ever to getting votes in the House and Senate, which could see it advanced to President Biden's desk.

    AICOA prohibits tech companies above a certain size from favoring their own products and services over their competitors. It applies to businesses considered "critical trading partners," meaning the company controls access to a platform through which business users reach their customers. Google, Apple, Amazon, and Meta in one way or another seemingly fall under the scope of this US legislation. 

    Continue reading
  • Amazon not happy with antitrust law targeting Amazon
    We assume the world's smallest violin is available right now on Prime

    Updated Amazon has blasted a proposed antitrust law that aims to clamp down on anti-competitive practices by Big Tech.

    The American Innovation and Choice Online Act (AICOA) led by Senators Amy Klobuchar (D-MN) and House Representative David Cicilline (D-RI) is a bipartisan bill, with Democrat and Republican support in the Senate and House. It is still making its way through Congress.

    The bill [PDF] prohibits certain "online platforms" from unfairly promoting their own products and services in a way that prevents or hampers third-party businesses in competing. Said platforms with 50 million-plus active monthly users in the US or 100,000-plus US business users, and either $550 billion-plus in annual sales or market cap or a billion-plus worldwide users, that act as a "critical trading partner" for suppliers would be affected. 

    Continue reading
  • Another ex-eBay exec admits cyberstalking web souk critics
    David Harville is seventh to cop to harassment campaign

    David Harville, eBay's former director of global resiliency, pleaded guilty this week to five felony counts of participating in a plan to harass and intimidate journalists who were critical of the online auction business.

    Harville is the last of seven former eBay employees/contractors charged by the US Justice Department to have admitted participating in a 2019 cyberstalking campaign to silence Ina and David Steiner, who publish the web newsletter and website EcommerceBytes.

    Former eBay employees/contractors Philip Cooke, Brian Gilbert, Stephanie Popp, Veronica Zea, and Stephanie Stockwell previously pleaded guilty. Cooke last July was sentenced to 18 months behind bars. Gilbert, Popp, Zea and Stockwell are currently awaiting sentencing.

    Continue reading

Biting the hand that feeds IT © 1998–2022