EBay and Craigslist are two of the most recognizable names for those looking to find items or sell items online. While Craigslist doesn’t run an online auction service like eBay, eBay has a very similar classified ad services called Kijiji.
EBay’s Kijiji service has led to lawsuits being filed by both eBay and Craigslist. EBay alleges that Craigslist has taken steps to harm its investment in Craigslist and to keep eBay from being able to choose board members as it is allowed under the terms of its minority stock holdings.
DailyTech reported earlier this month that eBay made documents relating to its charges against Craigslist public outlining in detail the myriad of complaints it levied against Craigslist.
Craigslist is now playing the same game and has filed a countersuit against eBay and made the documents relating to the countersuit (PDF) -- originally filed on May 13 -- publically available. The 26-page document paints a completely different picture on not only how eBay acquired its minority stake in Craigslist, but how eBay allegedly used its Craigslist board position to harm Craigslist while simultaneously using information gleaned from Craigslist to help Kijiji.
Craigslist says in the court filings that eBay engaged in conduct designed to harm Craigslist since it acquired its interest in the company. The conduct includes unlawful and unfair competition, misappropriation of proprietary information, deceptive passing-off, business interference, false advertising, phishing attacks, trademark infringement, trademark dilution, breaches of fiduciary duty and my personal favorite -- free-riding.
Craigslist alleges that in the months leading up to the launch of its competing Kijiji site -- which Craigslist maintains was referenced inside eBay as “craigslist killer” -- that eBay used its shareholder status to plant on Craigslist’s board the individual responsible for launching and/or operating Kijiji and other eBay classified ads programs in Europe.
Craigslist says that once eBay recognized the possible antitrust risk of having Kijiji insiders on the Craigslist board that it withdrew the board member in question and nominated to replace him with a second Kijiji insider responsible for the worldwide competition policy of Kijiji.
Craigslist goes on to claim that throughout eBay’s tenure as a Craigslist shareholder it has used veiled shareholder requests for information as a tool to demand confidential Craigslist information that could be used for anticompetitive purposes. Craigslist says that eBay went so far as to request real-time access to Craigslist computers for purposes of gleaning website metrics on Craigslist sites.
EBay is also said to have illegally used Craigslist’s mark and name in commerce to confuse the public. The court filing provided by Craigslist shows ads that appear to be from Google Adwords that prominently use the Craigslist name as the link to ads that were actually for Kijiji and when clicked went to the Craigslist competitor.
The court filing by Craigslist paints a picture of an eBay that acquired its minority control via unscrupulous tactics and then used its shareholder status to get information Craigslist feels was used to launch a competitive service worldwide.
Craigslist is seeking permanent injunctive relief against eBay, its officers, agents, representatives, employees, attorneys, and successors. It further seeks an injunction against eBay using the Craigslist mark or name in advertising.
Craigslist is asking the court to return eBay’s shares to Craigslist and that the court order eBay to divest interests in Craigslist. Craigslist is also seeking a court order for eBay to pay general, special, actual and statutory damages for Craigslist damages and eBay’s profits and other damages the court deems just.
