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eBay Sued by U.S. Government for Antitrust Violations

Sites include , . Published on November 19th, 2012. Written by Anthony West.

Here’s something you don’t read about every day, a major corporation agreeing with another major corporation not to hire its workers—even if they are desperate and come calling. This might sound incredulous, but this precisely what happened between eBay and business software maker, Intuit. As a result of that arrangement (describe it how you choose), the U.S. government is taking eBay to court for what it sees a clear breach of antitrust laws.

The agreement was struck between the two companies at a time when many of Intuit’s employees were seeking greener pastures at eBay. There was eventual reaching out between then CEO of eBay, Meg Whitman and Intuit’s founder, Scott Cook.

The other side of business

The lawsuit and its anchor, shows how underhanded big business can be sometimes; who would have thought that two large companies would come together to block movement of people on that scale. As one spokesperson for the Justice Department said in a quote to Bloomberg, the agreement between the two companies “harmed employees by lowering the salaries and benefits they might otherwise have commanded, and deprived these employees of better job opportunities at the other company.”

What is perhaps also shocking is eBay’s defense of the agreement; one release from the company said that “EBay’s hiring practices conform to the standards that the Department of Justice has approved in resolving cases against other companies. The DOJ is taking an overly aggressive interpretation in their enforcement of antitrust law in this area.”

These sorts of deals happen quite often (it seems)

In the tech space the talent pool is almost incestuous; one engineer starts out at this company, and then ends up working for another through poaching. But the collusion between large companies to safeguard their talent pool at times goes beyond what is considered ethical or legal. The present lawsuit being brought by the U.S. Justice Department alleges that the deal was in place from 2006 to 2009. It is interesting to note too that Apple has had a probe started into allegation sit might have arranged such a deal between itself and Google back in 2007. If this turns out to be true, then the eBay case may just end being the tip of the iceberg.

You can’t look at the roster of many of these companies without seeing ‘former Googler,’ ‘former eBay executive’ or any variation sitting in some present capacity. Yahoo’s present CEO, Marissa Mayer was at Google, and the guy that was there before her was at PayPal—it’s all one big cluster of talent moving constantly between companies.

The question is whether this level of corporate collusion, impacts people who have a lot more to lose than a hefty bonus. With the latest saga surrounding Wal-Mart and its treatment of workers looming, the eBay case sheds light on what might be a pervasive problem among Fortune 500 companies in the U.S.

Intuit of course has wiped its hands of the matter, and according to reports, the U.S. Justice Department has its cross hairs set on eBay only. When the settlement is reached (the most likely outcome here I think), we’ll update you.

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