Craigslist Sues eBay … Take Your Ball and Go Home!

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ADOTAS – In a corporate game of “I’m rubber and you’re glue” Craigslist is slapping eBay with a counter-lawsuit in which it accuses the online auctioneer of stealing corporate trade secrets, among a roster of other unseemly deeds.

Craigslist also charges eBay with unfair competition, diluting its minority stake in its business, fraud, copyright infringement and posting misleading advertisements on Google. (Craigslist claims eBay ran ads for Craigslist rival classified service kijiji – which eBay owns — that masqueraded as Craigslist ads.) Confused yet?

The countersuit (filed yesterday in California) is a response to eBay’s suit (filed in Delaware in April) alleging that Craiglist violated its rights as a minority shareholder. eBay claimed that in January, Craigslist founder Craig Newmark and chief Jim Buckmaster, unfairly diluted eBay’s economic interest in the company – but it didn’t get into specifics. In 2004, eBay bought a 28.4% stake in Craigslist.

“The recent actions by the Craigslist directors have disadvantaged eBay and its investment in Craigslist,” Mike Jacobson, eBay’s senior vice president and general counsel, said in a released statement last month. “Since negotiating our investment with Craigslist’s board in 2004, we have acted openly and in good faith as a minority shareholder, so we were surprised by these recent unilateral actions. We are asking the Delaware court to rescind these recent actions in order to protect eBay’s stockholders and preserve our investment.”

On Craigslist’s blog, in an entry titled “Unlawful and Unfair,” Buckmaster explains the company’s complaint: “We filed a complaint in California today, charging eBay 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.

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.”

If Craigslist were to “restore to craigslist all shares of the company acquired” itself, a.k.a. buy em back, it would cost the company about $1 billion.

eBay, for its part, released a statement expressing “regret” over Craigslist’s “unfounded and unsubstantiated claims.”

1 COMMENT

  1. […] ADOTAS — May 14 —  Craigslist is slapping eBay with a counter-lawsuit in which it accuses the online auctioneer of stealing corporate trade secrets, among a roster of other unseemly deeds. Craigslist also charges eBay with unfair competition, diluting its minority stake in its business, fraud, copyright infringement and posting misleading advertisements on Google. The countersuit is a response to eBay’s suit alleging that Craiglist violated its rights as a minority shareholder. FULL ARTICLE @ ADOTAS […]

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