Google Wallet launch brought an insight of what the consumers future holds for us. It also brought Google a new feud, with PayPal. Shortly after the announcement of Google Wallet and Google Offers, PayPal filed a lawsuit against Google at the Superior Court of the State of California (Santa Clara county) accusing the search giant that it used their company’s secrets.
The cause of this feud is Osama Bedier, former key executive for Paypal. Bedier worked at PayPal for 9 years. Paypal claims that Bedier, who used to work for their mobile-payments platform, shared company secrets with Google and third parties after being hired by them.
The hiring of Bedier attracted negative claims, that Bedier, “with his trade secret knowledge of PayPal’s plans and understanding of Google’s weaknesses as viewed by PayPal, Google bought the most comprehensive and sophisticated critique of its own problems” the suit said.
It is believed that Bedier transferred private PayPal documents outlining mobile payment strategies to his personal computer shortly before leaving PayPal to work for Google.
Another person involved is Stephanie Tilenius, Google VP of E-Commerce, also a former PayPal executive – consultant for eBay). She is accused that she broke contract obligations by recruiting Osama Bedier, who was in charge of negociating deals with the Google Android team for PayPal.
“At the very point when the companies were negotiating and finalising the Android-PayPal deal, Bedier was interviewing for a job at Google” the suit claims, and this without informing PayPal “of this conflicting position”.
The two former PayPal executives led the launch of Google’s own mobile payment system, built in partnership with Citigroup, Mastercard and Sprint. Google claims that the wallet service is open to all businesses and invited other banks, credit card issuers, payment networks and mobile carriers to workt with them.
Google’s response came shortly after:
“Silicon Valley was built on the ability of individuals to use their knowledge and expertise to seek better employment opportunities, an idea recognized by both California law and public policy.” It added that it respects the trade secrets and will seek to defend against the made claims
Basically, Google claims that they did not misuse any PayPal secrets and that the ideas implemented by Bedier are his own intellectual property.
The stakes are very high. Mobile payment market is estimated to reach $1 trillion. Many traditional payment companies are now switching to Silicon Valley.
Google and PayPal have done battle in the past, in 2006, with the launch of Google Checkout. However Google Checkout had minimal influence on PayPal’s market dominance.