The proverbial battle over mobile payments has turned into a legal one.
EBay Inc. and its PayPal subsidiary are suing Google and two former PayPal employees, accusing them of stealing trade secrets for the search engine giant's new mobile wallet service.
In a lawsuit filed Thursday in the Superior Court of California in Santa Clara County, eBay claims Osama Bedier, who left PayPal as vice president of platform, mobile and new ventures in January to join Google, had "intimate knowledge" about PayPal's mobile payment plans.
"Bedier knew that PayPal viewed Google as one of the competitors in the emergence of mobile payment at retail stores," the suit said. "Prior to Bedier's departure, PayPal undertook research and analysis of what it saw as Google's major problems and weaknesses in the mobile payment and point of sale context. At PayPal, Bedier was briefed on this analysis."
"In the course of his work at Google, Bedier and Google have misappropriated PayPal trade secrets by disclosing them within Google to major retailers," the suit said.
The suit also said that Stephanie Tilenius, Google's vice president of commerce who worked at eBay from 2001 to 2009, violated her contractual obligations with eBay by recruiting Bedier to work for Google.
Tilenius also tried to recruit other PayPal employees "via Facebook messages, in person and by providing Google recruiters with names and personal contact information of key PayPal employees," the suit said.
A Google spokesman could not immediately be reached for comment Friday morning.
Earlier on Thursday, Google unveiled a service that will let consumers load credit cards into a mobile application that can be used to pay for transactions at retailers by waving their phones in front of special payment terminals.
Google is initially partnering with Citigroup Inc., MasterCard Inc., First Data Corp. and several retailers on the Google Wallet service, which is currently being rolled out as a field test in New York and San Francisco. Google plans to make money by running a coupon system called Google Offers that will connect to the wallet service.
PayPal, which has focused primarily on online payment services for consumers and merchants, said it is working on its own service that would enable merchants to accept mobile payments at the point of sale.
"Both PayPal and Google are currently offering their mobile payment and point of sale technologies to major retailers for trial use," PayPal said in its suit. "Although PayPal's services and Google's services are not mutually exclusive, at this stage it is unlikely that a retailer would invest time and effort in testing both companies' products."
In a company blog post, PayPal's director of global communications, Amanda Pires, said the company prefers "to compete and innovate" but "sometimes the behaviors of people and competitors make legal action the only meaningful way for a company to protect one of its most valuable assets — its trade secrets."
