DOJ files antitrust suit against eBay

[JURIST] The US Department of Justice (DOJ) [official website] on Friday filed a civil antitrust lawsuit [complaint] in the US District Court for the Northern District of California [official website] against online auction company eBay [corporate website] alleging violations of antitrust law occurring from 2006 to 2009. The complaint avers that eBay violated the Sherman Act [15 USC § 1 text; Cornell backgrounder], by entering into a no-solicitation and no-hiring agreement with business software producer Intuit [corporate website] pursuant to which the companies agreed not to hire or recruit each other's employees. In particular, the DOJ challenges the legality of provisions that expressly prohibited eBay from hiring Intuit employees, even upon their affirmative inquiry to eBay for employment. The DOJ stated [press release] that the these provisions "eliminated a significant form of competition to the detriment of affected employees who were likely deprived of access to better job opportunities and salaries." The complaint elaborates:

Firms in the same or similar industries often compete to hire or retain talented employees. This is particularly true in technology companies in which particular expertise and highly specialized skills sought by one firm can often be found at another firm. Solicitation of skilled employees at other companies is an effective method of competing for needed employees ... eBay's agreement with Intuit eliminated this competition.
According to the DOJ, former eBay Chief Executive Officer, Meg Whitman and Intuit founder and Chairman of the Executive Committee, Scott Cook [Forbes profiles], were "intimately involved" in the formation and enforcement of the "handshake" agreement, which the DOJ characterized as an unlawful, "naked restraint of trade." The California Department of Justice [official website], headed by Attorney General Kamala Harris [official profile], worked closely with the US DOJ and filed a similar suit [press release] concurrently.

The DOJ has recently been involved in other lawsuits involving alleged violations of the Sherman Act. In early September a judge for the US District Court for the Southern District of New York [official website] approved [JURIST report] a settlement agreement between the DOJ and e-book publishers, including Apple, Hachette, HarperCollins, MacMillan, Penguin and Simon & Schuster [corporate websites] for alleged price-fixing violations under the Sherman Act. eBay has also been involved in litigation over trademark infringement in recent years as well. In July 2011 the EU Court of Justice [official website] ruled [JURIST report] that eBay may be liable on the part its users for infringing cosmetic producer L'Oreal's trademarks. In July 2010 Connecticut company XPRT Ventures LLC filed suit [JURIST report] against eBay in the US District Court for the District of Delaware [official website], claiming infringement of six patents for online auctions and payment systems.

 

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