DOJ and state of California throw lawsuits at eBay

Online marketplace accused of violating antitrust laws by agreeing to not hire Intuit employees

Financial trends and news by Steven Loeb
November 17, 2012
Short URL: http://vator.tv/n/2bcd

(Updated to reflect comment from Intuit)

The Justice Department and the state of California are both coming after eBay for antitrust violations, filing lawsuits against the online marketplace on Friday.

The lawsuits accuse eBay of agreeing to not recruit, or hire, employees working for Intuit, based on an agreement that began in 2006, and lasted until at least 2009. Recruiting personnel at eBay were given instructions not to pursue any potential applications that came from Intuit and to throw the resumes away.

Senior executives at both companies, including former CEO Meg Whitman, are said to have been “intimately involved” in both the formation, and the enforcement, of the agreement. Cook was a member of the board of directors at eBay at the time that the agreement was made.

“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,” Joseph Wayland, Acting Assistant Attorney General in charge of the Department of Justice’s Antitrust Division, 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.” 

Mountain View, California-based Intuit, the maker of financial software, including TurboTax and QuickBooks, isn’t named as a defendant in either the case brought by the Department of Justice or by the state of California, as it had previously settled a Justice Department case over hiring practices in 2010.

In September 2010, Intuit, along with five other companies, Adobe, Apple, Google, Intel and Pixar, were sued by the Department of Justice for similar agreements to not hire each other’s employees. All six companies agreed to a settlement.

The case against eBay comes from another similar lawsuit against Lucasfilm, which had an agreement with Pixar, from December 2010.

"This is an EBay matter,” Diane Carlini, an Intuit spokeswoman, told VatorNews. “The DOJ lawsuit clearly mentions Intuit but we have already resolved any concerns the DOJ had with our recruiting practices. We believe the matter is resolved and we are in compliance.”

EBay denies that it has done anything wrong and is vowing to “vigorously defend itself.”

“EBay Inc. strongly believes that the Department of Justice and California Attorney General are wrong and are using the wrong standard in these matters. 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. The DOJ and State Attorney General are taking an overly aggressive interpretation in their enforcement of antitrust law in this area,” Lara Wyss, an eBay spokesperson, told VatorNews.

EBay is not the only big internet company to have an antitrust lawsuit thrown at it recently.

Kickflip, the company behind the Gambit payment engine, leveled a lawsuit at Facebook in October for breaking antitrust laws by creating its own virtual currency.

(Image source: http://www.digitaltrends.com)

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