Feds sue eBay, accuse ex-CEO Whitman of enforcing noncompetitive agreement

Former eBay CEO Meg Whitman / Tom Pennington/Getty Images

WASHINGTON The Justice Department alleged Friday that Meg Whitman, the former CEO of eBay (EBAY), was intimately involved in making an anticompetitive agreement that prohibited eBay and Intuit (INTU) from hiring each other's employees.

In a 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.

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 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 specialized computer engineers and scientists.

The lawsuit seeks to prevent eBay from enforcing the agreement and from making similar agreements with other companies.

According to the complaint filed in federal court in San Jose, California, the agreement was in place from 2006 to 2009. Intuit is already subject to a settlement barring it from making such agreements.

eBay's revenues in 2011 were $11.7 billion. Intuit's 2011 revenues were $3.85 billion.

[PhilipCohen2]

What about the Feds doing something about eBay's calculated facilitation of massive auction fraud on its consumers?

The ugly reality for consumers dealing with the clunky, manipulative, unscrupulous and atrophying eBay/PayPal complex ...

"eBay-Facilitated Shill Bidding Fraud on eBay Auctions: Case Study #5" ... http://******/11F2eas

[pbarber12]

The problem seen above has even deeper issues, and has caused economic disaster for our U.S. engineering families. Our communities call upon our schools to have our students pursue math and science degrees, but our children know through experience watching their neighbors that an engineering career is currently not a stable job. At Virginia Tech University, known as a top Engineering school, the job recruiters this last year that came to hire students had a ratio of 4 business to 2 engineering. We, as a society, have unraveled the greatest engineering producing nation, and when you realize that 65% of the U.S. GDP was dependent upon engineering firms 10 years ago, you would think that we as a society we would give priority to maintaining such an important revenue source.

Instead we have allowed our corporations to ravage our engineering base that was responsible for producing millions of jobs. Corporations donating political money to our politicians at both the state and federal level have destroyed the earning potential of the engineers in several ways. Which ways do you ask? Below is a short list.

1) In California there are only 3 types of workers that allowed to work over 40 hours a week, and not be paid overtime - morticians, farm workers and engineers. In addition, they are allowed to classify all engineers as managers, so this means they are not hourly employees and can be worked overtime with no pay.

2) When an engineer is hired, the corporations have in the contracts that if you leave the company for any reason - fired, layoff, resign - you will not be able to work at a similar company for a year. This means if you are an aerospace engineer, you can't work at another aerospace engineering firm for a whole year. The engineer is then left to staying at the company with no or very small pay raises, and if laid off face unemployment for a long time and the taxpayers are footing the bill.

3) When an engineer is laid off from a company, they will hand you a severance package that includes the wording stating that you will not seek employment at another company for at least one year that you have been involved with in any meetings, negotiations, purchasing, etc. If you don't sign the paper, then you don't get the severance package. The engineer is then left to unemployment and the taxpayers are footing the bill.

4) Once laid off, a U.S. engineer has a very hard time finding a job. They have to compete now with foreign workers. Hiring foreign engineers is always cheaper, since they pay the same going wage required by federal law, but do not have to pay any benefits. The engineer is then left to long-term unemployment and the taxpayers are footing the bill. Additionally, all the tax monies from a U.S. engineers that could be working is now lost. The foreign engineers are sending their money back home overseas, not paying taxes (in the tune of billions of lost revenue), and the state funding for infrastructure and schools suffers greatly. We currently have around 1.2 million L1/H1B engineers in the U.S., and our corporations are currently asking Congress to up the L1 & H1B visas numbers higher this year claiming they can't find skilled workers. Can you believe it that we, you and I, are allowing this?

It is our fault that we allow our Congress and our state legislatures through out the U.S. to pass laws that have destroyed our U.S. engineering base. For President Obama to call for more math or more science in the schools will not help, while our businesses have no incentives to hire U.S. engineers. So, now many of our people are out of work - in the tune of millions. Without engineers making new products and then keeping that product intellectual information in the U.S. we have lost too many jobs. We have no one to blame, except for ourselves.

[Swift29]

Yea but the big boys and their minions will scream 'there's a darth of engineers' and 'we need to import more of 'em to stay competitive' while they use all sort of dirty tricks to not pay taxes, collude on prices, etc. And then salute the GOP while claiming they are job creators. Tired of the lies and behavior of big business in general. Not everybody but plenty of them are absolutely corrupt. Time to RE-REGULATE. And screw all the uber right wing nuts that can't see the forest for the trees.

[mcarriga]

Sounds like there's a market for employment and intellectual property attorneys to help laid off engineers. A sad state of affairs. But when you think about it, what would Edison have done if he were laid off? He would have invented a new industry. Sure your invention can be used in aerospace, but maybe there are other apps as well like communication or electronics. Every deal is negotiable and debatable. If you can fight something as low-tech as some doll designers disputing with Mattel, you can certainly fight high-tech issues. Sure it's a cartel, but they can't track everything, yet.

As far as foreign workers, that's always a factor. But you still have to outcompete even as their living standards catch up.

There are rewards for the innovative. And I disagree with the statements there are only 3 professions that get no overtime pay for working overtime. How about entrepreneurs? How about salaried professionals? How about small business people that get paid by the project and not by the hour?

Even if there were only one engineer left in the US, they should still not give up. They could find that breakthrough.

[kayak007]

An agreement by billionaires to limit income and free-market opportunities for American workers. Ebay and Intuit will get a slap on the wrist and will have their teams of attoneys find a different tack to maximize profits at workers expense.

[Swift29]

How ironic. Dirty hypocritical republicans scheming against the common employee. Meanwhile getting a million dollar raise in one form or another no doubt. And they talk about Ayn Rand like she was some god or something...

[RetiredArmy_Nurse]

It's a good thing the $150 million she spent did not buy the governorship in California. She would have implemented this greedy corporate mentality into the state's highest office. I'm in agreement with previous posters about ebay. It became nearly impossible for a small seller to make a profit with all the ebay fees, mandated paypal, & ship/handle cost ceilings. I'm still looking for an alternative to selling our old stuff, so if anyone has some really good recommendations, I'd love to hear it.

[Fed-Up_Patriot]

$150 million dollars seems like a good investment to buy a governorship.. Most people don't see how it works.. Think about back room deals, knowing ahead of time how certain laws will become, whom the gov't will award certain lucrative contracts too - the insider information allowed to our elected officials is incredible.. All they gotta do to make a ton of money is to get either themselves prepositioned with various investment instruments or somebody else. Also you do know that various "financial trust instruments" hide the investment members/owners and requires a court order and actual evidence of criminal wrong-doing before the court is allowed reveal the true investment/owners of these trust. If you follow it you'll notice that most of our elected officials make 10x-20x from their various "investments" instead of their salary doing their job. and what about all their friends and family members? Here's another fact for you every step of the way our leaders in Washington have strengthened the laws to hide ownership of financial trust instruments. Read up on real-estate trust for example to learn one example of how such trusts work.

I'll give you 1 common example. Didn't you guys always find it strange that locally wherever the planning commission was going to place the offramp for that new highway extension - they'd have friends or family that just happened by chance to buy that land for cheap months before the official path is announced. Many times you won't even know - especially if that land was bought by these individuals through a land trust.

This is how it works.. Think about it..

[endrepubs]

Another corrupt Republican!

[Swift29]

Damn straight!

[Wingsfan1983]

Got to love this. Meg frist lost on politics now in trouble in business. Let now go after Trump.

[omnibus66]

Ebay is sometimes a good place to find something oddball or rare that you can't find anywhere else. But when it comes to new stuff, you can almost always look around and find it cheaper someplace else. But like any big corporation, they are first and foremost out to make money. Lots of it, and by any means possible. Nothing surprising here.

[gjc1n1]

I used to buy lots of stuff from EBay. No more. They are just as expensive as a retail store. Also, most merchants do not offer a return policy. If there is something wrong with what you received, you are at the mercy of the merchant or the wimpy EBay policy makers.

[mrjustice1]

We must go to competitor auction sites, and avoid doing business with dominating and monopolizing Ebay/PayPal!

There is an increasing number of other auction and sales sites
which are FAR LESS COSTLY AS EBAY/PayPal!!!

We are all strongly urged to seek these other auction sites, and at the same time, we will retain a higher percentage of the proceeds and more dollars back to us.

Ebay's and its PayPal's attitude of supremacy, and abusive, monopolistic practices over us as Ebay/PayPal's donkeys and fools, is coming to an end, but that still depends on our resolve to cut our dependency on it.

[owlcroft]

"Normal business"? "Going too far"? What part of unlawful per se is hard to understand? This is not an occult art: every executive in the USA knows those laws. The two companies knowingly and willingly broke a major, simple, well-known law. The end.

[Fed-Up_Patriot]

I'd say $5 billion in damages collectively between the 2 companies would be fair.. And much of this needs to be given back to the victims of this crime. The executives involved should also be facing criminal prosecution - and potential jail time - if at all possible.

[Swift29]

I totally agree with Fed Up Patriot. It's way past time we put the corp's feet to the fire. We can simplify the tax code, eliminate "loop-holes" and sweet deals and make it fair for smaller companies to prosper, all without harming the economy, if we just keep to the middle. But the right and their politicians and backers will scream bloody murder. And then brainwash more weak minds that those disenfranchised by business practices are 'looking for a free ride.'