EBay, PayPal sue Google over mobile wallet

Within hours of the unveiling of “Google Wallet” on Thursday, eBay and PayPal filed a lawsuit charging that the internet giant tapped into trade secrets for the mobile payments project.

PayPal spent three years trying to work out a deal in which it would handle payments for Android smartphones, only to see Google scuttle the talks and hire PayPal lead negotiator Osama Bedier, according to court documents.

Google Wallet will initially work with Google’s Nexus S 4G smartphone from Sprint, the third-largest US wireless provider, and will eventually be expanded to other phones equipped with near field communication (NFC) technology.

An NFC chip in a phone allows a user who has entered his or her credit card details to “tap-and-pay” for purchases at a checkout register equipped with the PayPass system from CitiMasterCard.

“By hiring Bedier, with his trade secret knowledge of PayPal’s plans and understanding of Google’s weaknesses as viewed by the industry leader, Google bought the most comprehensive and sophisticated critique of its own problems available,” the court filing said.

“Google put Bedier in charge of its mobile payment business, virtually ensuring that Bedier would misappropriate PayPal’s trade secrets concerning planning and competitive assessments in mobile payment.”

Osama Bedier worked at PayPal as a vice-president of platform, mobile, and new ventures until being hired in January by Google.

Bedier was lured to Google by Stephanie Tilenius, who left her job as an eBay executive in late 2009 and went to work for Google, according to the lawsuit.

Google could not immediately be reached for comment on the allegations.

Centre stage
Bedier and Tilenius took centre stage at the grand unveiling on Thursday of Google Wallet, a platform for using Android-based smartphones to pay for purchases at real world shops.

“[Bedier] had an intimate knowledge of PayPal’s capabilities, strategies, plans, and market intelligence regarding mobile payment and related technologies,” the court documents said.

“He is now leading Google’s efforts to bring point-of-sale technologies and services to retailers on its behalf.”

The lawsuit named Google, Bedier, and Tilenius as defendants, accusing them of misappropriation of trade secrets, breach of contract, and unfair business practices.

PayPal said it spent three years trying to work out a deal with Google in which eBay would handle payments at Android Market for smartphone applications, and that Bedier had led the negotiations.

“At the very point when the companies were negotiating and finalising the Android-PayPal deal, Bedier was interviewing for a job at Google without informing PayPal of this conflicting position,” the court documents said.

PayPal called on the state court in the California county where both companies are based to order Google to “undo” the misuse of trade secrets and pay unspecified damages.—AFP


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