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PayPal sues Google over mobile payments systems

May 31, 2011 By: Dr Search Principal Consultant at the Search Clinic Category: Customer Service, Ecommerce, Google, LinkedIn, Mobile Marketing, mobile phones, smart phones, Technology Companies, Uncategorized

Google is being sued by the online payments company PayPal for allegedly stealing its secrets less than 24 hours after the search engine unveiled a technology to allow consumers to use their phones as credit cards.PayPal sues Google over mobile payments systemsThe lawsuit, which was filed on Thursday in Santa Clara, California, accuses Osama Bedier, a former PayPal executive now at Google, of misappropriating trade secrets and using them to help his new employer develop its technology.

Stephanie Tilenius, another former PayPal executive now at Google, is alleged to have breached her contract by hiring Mr Bedier from PayPal at the start of this year.

The legal action underlines the scale of the fight between the two companies in the growing mobile payment market, as well as the fierce battle in Silicon Valley for employees.

PayPal, which is owned by online marketplace eBay, is developing technology to be used by shoppers when paying in shops.

Google on Thursday announced a deal with Mastercard and Citigroup that would allow consumers with a phone using its Android operating system to make payments with it.

PayPal has developed “a wide range of trade secrets in the areas of mobile payment, point of sale, and digital wallet, which give PayPal an advantage over both existing competitors and new market entrants, such as Google,” the lawsuit alleges.

According to the suit, Mr Bedier was a key figure in leading PayPal’s ongoing negotiations with Google over making PayPal a payment option on Google’s Android operating system, which is the market leader in the US.

A deal was about to be signed in January, when Larry Page, the co-founder of Google, announced plans to take over as chief executive from Eric Schmidt. Four days later, Mr Bedier left to take a job at Google, the suit alleges, and develop a rival technology to PayPal’s.

Meanwhile, Ms Tilenius, who left PayPal for Google in October 2009, began trying to hire Mr Bedier last summer, it is alleged. “I heard from a little birdie that you might be open to bigger and better challenges, I have a HUGE opportunity for you,” Ms Tilenius posted in a Facebook message to Mr Bedier around July 15 last year, the lawsuit claims. During last autumn, Mr Bedier was interviewed by several Google executives including Mr Page and Mr Schmidt.

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