Craigslist returns fire in eBay suit

After being hit with an eBay legal missile last month, Craigslist has responded with a projectile of its own: the company has filed a countersuit accusing the online auction company — which owns a 25-per-cent stake in Craigslist — with “unlawful and unfair competition, misappropriation of proprietary information, deceptive passing-off, business interference, false advertising, phishing attacks, free-riding, trademark infringement, trademark dilution, and breaches of fiduciary duty.” According to the blog post by CEO Jim Buckmaster:

“We respectfully ask the Superior Court in San Francisco to enjoin this conduct and order eBay to (1) make full restitution to craigslist, (2) disgorge their related profits (3) restore to craigslist all shares of the company acquired by means of, or for the purpose of unfair competition, and (4) pay punitive damages for their malicious behavior.”

As you may recall, eBay sued Craigslist last month alleging a variety of behaviour on the part of co-founders — and controlling shareholders — Craig Newmark and Jim Buckmaster, including the issuance of shares that diluted eBay’s stake below the 25-per-cent mark, as well as the creation of an even more dilutive “shareholder rights” agreement, otherwise known as a “poison pill” that had the effect of making it impossible for eBay to sell its stake to anyone other than Craig and/or Jim. Craigslist later made the statement public.

They’ve now done the same thing with their countersuit by posting the entire thing online. Among other things, the suit alleges that eBay tried twice to put executives from its Kijiji unit — which now competes head-to-head with Craigslist in the U.S. — on the board of the classified site. The lawsuit also says that eBay “has used Craigslist’s mark and name in commerce to confuse the public and illegally divert Internet traffic from Craigslist to eBay and its Kijiji site,” which appears to involve the buying of Google ads that linked to the eBay site but used Craigslist’s name.

The bulk of the suit seems concerned with what Craigslist says is eBay’s desire to gain access to “proprietary competitive information” to help Kijiji. My friend and fellow mesh organizer Rob Hyndman, a lawyer who specializes in technology startups, says that the lawsuit seems to be an attempt by Craigslist to “accomplish by litigation what it failed to accomplish by business planning and sensible precautions.”

12 thoughts on “Craigslist returns fire in eBay suit

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  2. Pingback: Tech Scoop - Hot Technology Gossip » Craigslist Countersues eBay… But Still Doesn’t Answer Questions About Diluting eBay

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  6. This is sad. It's going to take 2 good companies and get ugly.

    But maybe it'll push CL to come into the 21st century… I can't even sort or filter search results yet on CL.

    • Response to antje wilsch,

      Oh you poor thing… that must be terrible for you that CL doesn't conform to your expectations. It seems to me that millions of people do just fine with Craigslist every day and can easily navigate their site. I for one respect them for offering a free site –something eBay is too willing to try and change, while shafting and mowing down anything and everyone in the process.

      Oh… and that pitiful comment you stated: “This is sad. It's going to take 2 good companies and get ugly.”

      Have I got news-flash for you antje wilsch… There's only ONE good company here and that's Craigslist –a company who doesn't believe in buying the world and it's inhabitants.

      eBay is and has been in a death spiral to which there is no recovery. They have abused their customers for years. They have absolutely no concept of loyalty or compassion. eBay is completely motivated by greed. I for one, will not miss them when they've been defeated by their own all-consuming lust for money.

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