Craigslist gets personal with eBay countersuit

'Used shareholding unlawfully'

By John Oates • Get more from this author

Posted in Financial News, 14th May 2008 09:51 GMT

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Craigslist has filed a blistering countersuit against rival and shareholder eBay, accusing the auction giant of a range of transgressions including abusing its role on classified ad site's board.

Documents accuse the online tat seller of unfair and unlawful competition, false advertising, trademark infringement, unfair competition and breach of fiduciary duty.

eBay bought a minority interest in Craigslist from another shareholder in 2004. Craigslist alleges that in the run-up to the launch of eBay's rival classified service Kijiji the auctioneer used its shareholding to put two Kijiji insiders onto the Craigslist board, as well as requesting information which it used for anticompetitive purposes.

eBay is already suing Craigslist accusing it of diluting its shareholding. When eBay launched its Kijiji service in the US Craigslist founder Craig Newmark and CEO Jim Buckmaster told the auctioneer that as it was now an effective competitor eBay was losing some voting rights connected to its stake. The two also wrote to eBay boss Meg Whitman warning her they were looking at options to buy back their stake and were no longer comfortable having eBay as a shareholder.

In response eBay is suing to get its shareholder rights back.

Craigslist accuses eBay of trying to use its minority stake to stage a full takeover. The filing said: "Mr Newmark and Mr Buckmaster were taken aback by eBay's behavior, and feared that they had a wolf in sheep's clothing in their midst."

eBay is also accused of demanding confidential information both before and after the June 2007 launch of its own classified service Kijiji in the US. It is also accused of registering Craigslist-related URLs and using them to direct surfers to Kijiji.

The documents are available as a pdf from here. ®

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