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Antitrust Settlements with eBay Announced By U.S., State Justice Depts

A pair of antitrust lawsuits accused eBay Inc. of entering into an illegal "no poaching" agreement with Intuit Inc. of Mountain View.

The U.S. and California justice departments today announced proposed settlements of a pair of antitrust lawsuits that accused eBay Inc. of entering into an illegal "no poaching" agreement with Intuit Inc.

The proposed settlements were filed in federal court in San Jose today and must be approved by U.S. District Judge Edward Davila after a 60-day public comment period before they become final.

The two lawsuits were filed against the San Jose-based online auction and shopping company in 2012.
  
They alleged that eBay violated federal and state antitrust laws by agreeing with Intuit between 2006 and 2009 that the two firms wouldn't recruit employees from one another and that eBay would not hire Intuit workers who approached it.

Intuit, a financial software company in Mountain View, was not part of today's settlements because it reached separate agreements with the U.S. Justice Department in 2010 and with California Attorney General Kamala Harris last year.

EBay's settlement with the U.S. Justice Department will prohibit it from agreeing with any other company to restrict recruitment, while its settlement with Harris's office requires it to pay $3.75 million for worker restitution, costs and fines.

A restitution fund of $2.375 million will provide payments of between $150 and $10,000 for employees who lost job opportunities. The remaining $1.375 million will go to the state for legal and administrative costs, a fine and harm to the California economy.

"The behavior was blatant and egregious. And the agreements were fully documented in company electronic communications," U.S. Justice Department antitrust chief Bill Baer alleged at a news conference.

Baer said the evidence included emails between former eBay Chief Executive Officer Meg Whitman and Intuit founder and executive committee chair Scott Cook.

"eBay's agreement with Intuit served no purpose but to limit competition between the two firms for employees, distorting the labor market and causing employees to lose opportunities for better jobs and higher pay," Baer said.

Harris said, "No-poach agreements unfairly punish talented workers and stunt our state's economic growth."

The settlements provide that eBay doesn't admit to violating any laws.

The company said in a statement, "eBay continues to believe that the policy that prompted this lawsuit was acceptable and legal, and led to no anticompetitive effects in the talent market in which eBay competed."

The federal government's lawsuit against eBay was one of a series filed by the Justice Department as a result of antitrust investigations of the recruitment practices of Bay Area high-tech companies.

In September 2010, the department simultaneously filed a lawsuit and proposed settlement with Intuit, Adobe Systems Inc., Apple Inc., Google Inc., Intel Corp. and Pixar Animation Studios.
  
It filed a similar lawsuit and settlement with Lucasfilm Ltd. three months later.
Separately, workers filed a class action lawsuit against those seven companies in federal court in San Jose in 2011 on behalf of 64,000 technical employees, seeking financial compensation for lost opportunities.

Intuit, Lucasfilm and Pixar reached settlements totaling $20 million with the workers last year, and last week, Adobe, Apple, Google and Intel announced in a letter to the court that they had also reached a settlement.

That pact averts a trial that was scheduled to begin before U.S. District Judge Lucy Koh on May 27. Instead, lawyers for the companies will inform Koh of the details of the settlement, including the amount of compensation, by that date, according to the letter.

--Bay City News

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