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Craigslist accuses eBay of free-riding among other things

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.



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Ownership
By srue on 5/14/2008 1:06:50 PM , Rating: 2
I had no idea that Ebay owned part of Craigslist. Why not just buy the whole thing out and be done with it?

BTW, "myriad" is an adjective, not a noun.




RE: Ownership
By zombiexl on 5/14/2008 1:09:19 PM , Rating: 5
If all the claims craigslist has made are true i think ebay is going to be sitting in some hot water.


RE: Ownership
By srue on 5/14/2008 1:29:54 PM , Rating: 2
quote:
BTW, "myriad" is an adjective, not a noun.


Ok, I withdraw my little aside. I did a little research, and it looks like it's perfectly okay to use "myriad" as a noun. This is news to me, but I should have checked before I posted.


RE: Ownership
RE: Ownership
By OrSin on 5/14/2008 2:01:27 PM , Rating: 4
Craiglist never want to sell. They sold a very small amount (10%) so they owns could stop coming out of pocket for server cost. This was sold to a private investor. E-bay got it fromt he private investor. It was very shady.


RE: Ownership
By walk2k on 5/14/08, Rating: -1
RE: Ownership
By i3arracuda on 5/14/2008 2:55:21 PM , Rating: 4
quote:
I had no idea that Ebay owned part of Craigslist. Why not just buy the whole thing out and be done with it?


They are most likely afraid of the retaliatory negative feedback...


RE: Ownership
By omnicronx on 5/14/2008 4:01:23 PM , Rating: 2
quote:
Why not just buy the whole thing out and be done with it?
Craigslist is not a publically traded company, Ebay only managed to get a 25% stake in the company because a former craigslist employee who had a stake in the company sold his shares.. for an undisclosed amount of course... I am sure if it were up to the current President and CEO, Ebay would not have a stake at all.


RE: Ownership
By Nfarce on 5/14/2008 9:24:03 PM , Rating: 2
quote:
BTW, "myriad" is an adjective, not a noun.


Huh. Another typical product of our modern government education system. God help us.

From Webster online:

Main Entry:

1myr·i·ad Listen to the pronunciation of 1myriad

Pronunciation:
\'mir-e-?d\

Function: noun

Etymology:

Greek myriad-, myrias, from myrioi countless, ten thousand
Date: 1555

1 : ten thousand 2 : a great number


does anyone proofread these?
By Chudilo on 5/14/2008 2:16:40 PM , Rating: 3
"sheds a completely different picture"

You either shed a light or present a picture




Ahhh, that's who
By redly1 on 5/14/2008 2:32:48 PM , Rating: 2
I bet it's a hoard of e-bay staffers that are posting all those 2006 Honda Accords for $2900 on CraigsList




Logical flaw?
By kinnoch on 5/14/2008 10:28:22 PM , Rating: 2
quote:
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.


eBay recognized that having a Kijiji representative on the board could have anti trust risks, so they solved that concern by replacing him with another Kijiji representative?

Is daily tech making the assumption that that is why they replaced him?




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