Craigslist files lawsuit against eBay, claims unfair competition

UPDATE (3:50 p.m.):To include eBay response.

Craigslist's headquarters in San Francisco's Sunset District

(Credit: Greg Sandoval)

Craigslist, the Web's No.1 online classified site, has filed a lawsuit against eBay, in a move that will surprise few.

According to a copy of the lawsuit, filed Tuesday in California Superior Court in San Francisco, Craigslist accuses eBay of unfair competition, misappropriation of proprietary information, false advertising, and breach of fiduciary duty. Craigslist has asked the court to force eBay to surrender its interest in the company.

The two companies have been circling each other ever since eBay, which is a minority shareholder in Craigslist, opened a U.S. version of Kijiji, a Craigslist competitor. The hostilities between the Web's top auctioneer and classifieds section were kept quiet until last month when eBay filed a lawsuit against Craigslist alleging that the company tried to dilute eBay's 28 percent share.

The move was designed by Craigslist's founder Craig Newmark and CEO Jim Buckmaster to remove eBay from Craigslist's board of directors, eBay alleged in its suit.

On Tuesday, eBay issued a statement: "We regret that Craigslist felt compelled to resort to unfounded and unsubstantiated claims in order to divert attention from actions by Craigslist's board" adding that Craigslist and eBay always agreed that the two sides have the "absolute right to compete with each other."

The two sides have coexisted relatively peacefully since August 2004, when eBay bought a minority interest in Craigslist. Last summer, when eBay launched Kijiji, Buckmaster told CNET News.com that he wasn't worried about having a competitor sitting on the board. His attitude changed just weeks after when he asked eBay to sell its position in the company, according to court documents filed by eBay.

Meg Whitman, eBay's then CEO, declined to sell but the reasons for Buckmaster's change of heart were outlined in Craigslist's suit.

In the months leading up to the U.S. launch of Kijiji, "eBay used its shareholder status to plant on Craigslist's board of directors the individual responsible for launching and/or operating Kijiji," Craigslist said in its suit.

Craigslist also said that eBay has "hounded" Craigslist managers with "improper demands for confidential Craigslist information, which could be used for anticompetitive reasons."

[Thomas, David]

Man, I hope they sue the crap out of eBay

[mascarian]

Craigslist is the last website I like to see gone. I dont care for Ebay who has turned to a big shark swallowing everything little fish out there. I understand that business is business but there are always lines that should not be crossed. Ebay ought to know better than to mess with craigslist because craigslist is operated by some decent people whose main goal in life is not money. Craigslist staff is not out for the billions like most dot coms are, and for that they got my eternal respect. I am a craiger for life! Craig and Jim rock! As for ebay, I like to remind them that hey, no matter how big of a fish you are, just remember that the ocean is big and there has got to be a bigger fish than you out there, and ya, you may get swallowed one day!!!!

[Twizznot]

..Craigslist is a dinosaur in the internet world... Kijiji is waaaayyyy better!!! ...

[ceo715]

I looked at motorcycle ads in the Seattle area... kijiji had 49 total....... Craigslist had 400 for Saturday...... and kijiji is better how......????? I guess if you want far less to pick from its is a great place to shop..... or if you are trying to sell to far fewer people... it is a great place to post....

[classifieds]

motorcycle classifieds are my favorites

[fingertrap]

Yea, Craigslist will fall to the fire which is an overabundance of people making the real money doing more predatory things. People posting more ads are going to get noticed more, and this is just the name of the game. With the counterculture of contract flagging such as Craigs Hitmen www.craigshitmen.com , Craigslist could have a chance, however fraud is blowing up as well. Craigslist will become paid eventually, then Kijiji will reign supreme for its time period.