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Computerworld Craigslist countersues eBay, escalating legal fight
Lawsuit sheds light on tensions between the companies
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May 14, 2008 (IDG News Service) Classified-advertising site Craigslist Inc. is countersuing eBay Inc., accusing the online auction company of using its stake in Craigslist to misappropriate proprietary information and engage in false advertising, trademark infringement and a host of other wrongdoings.
The lawsuit is a response to eBay's suit filed April 22 against Craigslist, which charged that Craigslist's board of directors secretly plotted to dilute eBay's 28.4% investment in the site after eBay launched a competing online classified-advertising service called Kijiji. EBay launched Kijiji overseas in 2005 and in the U.S. last year.
Craigslist's countersuit, filed yesterday with the Superior Court of the State of California, reveals a sea of bad blood between the companies and escalates their legal battle. It also sheds light on tensions between the two companies that began even before eBay purchased its stake in Craigslist in August 2004.
In its suit, Craigslist accuses eBay of calling Kijiji a "Craigslist killer" inside the company and using the Craigslist moniker to confuse the public and "illegally divert" Internet traffic from Craigslist to eBay and the Kijiji site. Craigslist also accuses eBay of treating it as a subsidiary and making repeated unreasonable demands for confidential information.
Craigslist is asking the court to order eBay to return to it all shares acquired "by means of, or for the purpose of, unfair competition." It is also asking that eBay pay damages and return the profits it made from its misuse of Craigslist's information and trademark.
Craigslist has posted a link to the lawsuit (download PDF) on its Web site in a blog posting by CEO Jim Buckmaster. In the posting, he briefly outlines the charges his company is making against eBay and the relief Craigslist is requesting from the court.
According to eBay's suit against Craigslist, Buckmaster and Craigslist founder Craig Newmark breached "fiduciary duties" to the company. EBay accused the pair of diluting its stake to 24.85% of Craigslist's outstanding shares so eBay would not have the 25% investment it needed to elect a director to Craiglist's board.
Reprinted with permission from
IDG.netStory copyright 2008 International Data Group. All rights reserved.
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