When Amazon Home Services launched this past April, the swimming pool industry had a mixed reaction to the news.
It already was well known that brick-and-mortar retailers were concerned about the site’s ability to undercut small business. Now Amazon was trying to become a homeowner’s one-stop shop for local contractors, but for a price. Professionals who landed work from the new lead-generation service would have to pay upwards of 20 percent for each signed job contract, and to many this was a hefty price tag. Others, however, lauded Amazon’s approach of handpicking pros from the cream of the contractor crop, claiming it could weed out fly-by-night workers.
“If they’re only going to use licensed contractors, then I’m all for it,” Kurt Schuster, owner of Scottsdale, Ariz.-based Badger Pool Services, told Pool & Spa News earlier this year. “That’s going to eliminate 80 percent of the pool guys out there.”
As it turns out, however, the very thing that Amazon Home Services has touted as its unique platform could potentially become its downfall - and at the hands of its competitor, Angie’s List, no less.
In a lawsuit filed June 19, 2015, in U.S. District Court in Indianapolis, Angie’s List stated that Amazon stole proprietary information to establish the home services business. According to Lexology, the complaint alleges breach of contract, misappropriation of trade secrets, computer trespass, theft, conversion, unfair competition, violation of the Stored Communications Act, civil conspiracy, violations of the Computer Fraud & Abuse Act, tortious interference with contract, and injunction.
The complaint further suggests that dozens of Amazon employees signed up for Angie’s List memberships and attempted to poach some of the most highly sought after professionals on the site.
Amazon recently fired back, arguing that its tactics are common in the home services industry and are acceptable, reports the Indianapolis Business Journal.
It’s possible the courts will agree. Amazon fought successfully for a court order to have Angie’s List search its customer-relationship-management software “to identify the extent to which Angie’s List sales personnel used information from other deals providers to identify merchants likely to participate in an Angie’s List ‘Big Deal’ ” offer, the news agency stated.
Time will tell whether the lawsuit will influence consumers and the way they research companies prior to hiring them for a job. In the meantime, a preliminary hearing is set for Oct. 13.
Of course, neither party's attorney was willing to comment to media on the pending lawsuit, which is in such an early stage that it is unclear which direction the courts will take. But it still has left industry experts to speculate about where the line is drawn between legal and illegal business practices.
Some observers, such as landscape architect Scott Cohen, have echoed similar sentiments as Amazon’s actual defense.
“Amazon going into Angie’s List is no different than when I am at a pool show and other companies are passing out their business cards to people at the show,” says the president of The Green Scene Landscaping and Pools in Northridge, Calif.
It’s no secret that lead generation sites such as Angie’s List and Yelp have been called into question, particularly by companies claiming to have been the victim of unfair reviews. As a result, not everyone is as forgiving, with some comparing Amazon’s alleged tactics with the unethical practices that sites such as Yelp have been accused of.
In their minds, such behavior is almost to be expected. “It’s not shocking,” says Jesse Cryns, a partner at Juniper Landscape Co. in San Diego.