Ebay sued over noncompetition agreement
The Justice Department alleged Friday that Meg Whitman, the former CEO of eBay Inc, was intimately involved in making an anticompetitive agreement that prohibited eBay and Intuit Inc from hiring each other's employees.
In a federal lawsuit, the government said Whitman and Scott Cook, Intuit's founder and executive committee chair, were involved in forming, monitoring and enforcing the anticompetitive agreement. California Attorney General Kamala Harris filed a separate lawsuit under state law, which she said contains stronger protections against anticompetitive practices than federal law.
Cook was a member of eBay's board of directors at the same time he was making complaints about eBay's recruiting of Intuit 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," said acting Assistant Attorney General Joseph Wayland, who is in charge of the US Justice Department's antitrust division. The division "has consistently taken the position that these kinds of agreements are per se (on their face) unlawful under antitrust laws." The two companies compete directly for specialised computer engineers and scientists.
EBay spokesperson Lara Wyss said the Justice Department and the California attorney general "are taking an overly aggressive interpretation in their enforcement of antitrust law in this area. EBay will vigorously defend itself." The company said both the federal and state governments "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 federal lawsuit seeks to prevent eBay from enforcing the agreement and from making similar agreements with other companies.