Google takes cover under rules, PayPal up in arms

It’s a full-scale war raging between Google and eBay’s PayPal. Google has brushed aside the charge that it stole PayPal trade secrets to build its new mobile application that turns a smartphone into an electronic wallet.

The Internet search giant is drawing up ambitious plans to replace your credit card with smartphones. But somewhere along the way, it has rubbed the online payment pioneer PayPal the wrong way. PayPal is crying hoarse, saying Google took away its ideas with a pair of new hires. It has filed a lawsuit in a California state court, just hours after the unveiling of the Google Wallet payment service in New York.

[caption id=“attachment_17173” align=“alignleft” width=“380” caption=“PayPal is crying hoarse, saying Google took away its ideas with a pair of new hires.Karen Bleir/AFP Photo”]  [/caption]

PayPal had worked furiously for three years to handle payments for Android smartphones, only to see Google scuttle the talks and hire PayPal lead negotiator Osama Bedier, according to court documents. Stephanie Tilenius, previously employed with eBay, is the other executive identified by PayPal behind the intellectual heist.

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In its response on Friday, Google submitted that it merely selected talented candidates to run its mobile payments service and then made them irresistible offers. “ Silicon Valley was built on the ability of individuals to use their knowledge and expertise to seek better employment opportunities, a principle recognised by both California law and public policy,” Google spokesman Aaron Zamost told AFP. “We respect trade secrets, and will defend ourselves against these claims.”

Google brought in Bedier, a PayPal executive for nine years, while the two companies were talking alliance. After some initial hesitations, Bedier left PayPal to become Google’s vice-president of payments four months ago. Before leaving, Bedier transferred some of PayPal’s secrets to his computer and also uploaded other sensitive information to an Internet storage locker called DropBox, the suit alleged. Bedier also began lobbying for Google to hire other PayPal employees working on mobile payments before he took the new job, the suit said.

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There is nothing new in a company suing its rival over poaching of a key executive. Google was dragged to court some six years ago when it hired a top Microsoft official to oversee its China operations. Before the case was settled, both companies filed documents that revealed colourful details about their rivalry.