Amazon.com Inc. (NASDAQ:AMZN) is being accused by Angie’s List Inc (NASDAQ:ANGI) for using its service in order to conduct a vast number of searches to locate and contact professional service providers on its website for Amazon Local.
Amazon’s Federal Lawsuit Headache
It was discovered this week by local news reports that Angie’s List filed a federal lawsuit at a U.S. District Court in Indianapolis on Wednesday.
The lawsuit alleges that executives from Amazon Local and other company employees garnered access to an incredible amount of information by signing up as Angie’s List members. Once inside the web portal, the lawsuit claims, Amazon downloaded provider profiles, member reviews and other proprietary information.
The lawsuit further accuses Amazon Local of attempting to generate business from service providers whose names it got a hold of from the online profiles. In other words, instead of compiling its own database it allegedly gathered the contacts from Angie’s List.
According to the allegations, Amazon Local is using this data to start a competing service to Angie’s List. The website said there is one part of the member agreement that “explicitly prohibits the use of Angie’s List’s accounts and information for commercial purposes.”
Cheryl Reed, an Angie’s List spokesperson, issued a statement regarding the lawsuit:
Angie’s List has spent more than 20 years developing our substantial database of proprietary information relating to home improvement service providers, consumer preferences and expectations, and industry standards across the country. This information is available to Angie’s List customers for personal use — not for other businesses to use for commercial gain. We welcome competition, but on fair and legal grounds.”
Earlier this year, Amazon Local gained a footing in the home services market with Amazon Home Services.
Details Inside the Lawsuit
Several Amazon Local employees, who alleged to have violated the terms of agreement, were named as co-defendants in the lawsuit.
The lawsuit comes with a number of charges, including computer trespass, civil conspiracy, misappropriation of trade secrets, theft and violations of the Computer Fraud and Abuse Act. Angie’s List is seeking damages and an end to Amazon Local’s business model of using Angie’s List information.
Amazon Local has chosen not to devote the necessary time, resources and effort to compete legitimately with Angie’s List,” the 83-page complaint reads. “Instead, Amazon Local and its employees have chosen the shortcut of surreptitiously accessing and misappropriating Angie’s List’s proprietary information … through dozens (if not more) of Angie’s List membership accounts that were fraudulently obtained and misused.”
The complaint cited one particular instance involving an Amazon representative, who had allegedly perused hundreds of professionals in the Albuquerque area, though the person lived in Seattle. In a three-month timespan, the individual scanned for professionals in an array of fields, like upholstery cleaning, tree service and hauling. Using the same account, the person sent a message to these service providers:
I am reaching out to see if you would be interested in doing a similar offer on Amazon as you are doing on Angie’s List.”
Amazon has not publicly commented on the civil litigation.
This comes as Amazon is facing a legal battle over the .amazon web domain.
