Craigslist Fires Back at EBay, Alleging Bogus Google Ads

Includes: EBAY, GOOG
by: Larry Dignan

Craigslist has filed its response to eBay’s (NASDAQ:EBAY) lawsuit and the company hits back – hard. Craigslist alleges that eBay participated in everything from “unlawful and unfair competition,” to false advertising, business interference and even phishing attacks.

The official list via Craigslist:

“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.”

Craigslist wants the Superior Court in San Francisco to enjoin the conduct and order eBay to pay restitution, return its holdings in the company, pay damages and disgorge profits. Chance are that won’t happen, but it’s safe to say that this spat has gone nuclear in short order.

EBay sued Craigslist in April alleging that the company and its owners Craig Newmark and Jim Buckmaster “adopted measures that, among other things, unfairly diluted eBay’s economic interest in Craigslist by more than 10 percent.”

Now its Craigslist’s turn. In its complaint, the company says:

  • Since acquiring its interest, however, eBay has engaged in conduct designed to harm Craigslist, its users, and consumers in California and elsewhere.
  • In the months leading up to its Kijiji launch in the U.S., eBay planted “the individual responsible for launching and/or operating Kijiji and other eBay classified properties in Europe.” After eBay saw the antitrust risk, the company withdrew him from the board.
  • EBay used Craiglist’s trademark to divert traffic to Kijiji.
  • EBay tried to lift traffic via bogus Google ads.

  • Craigslist portrays itself as a company that was hoodwinked by eBay’s claim that it shared its community values.
  • EBay tried to treat Craigslist as a subsidiary even though it didn’t own a majority stake. “eBay even went so far as to request real-time access to Craigslist’s computer systems so that eBay could directly monitor site usage data, giving eBay the same access to proprietary information,” wrote Craigslist. “Mr. Newmark and Mr. Buckmaster were taken aback by eBay’s behavior and feared they had a wolf in sheep’s clothing in their midst.”

The bottom line: Craigslist argues that if eBay isn’t enjoined, it will continue its behavior. What will the court of public opinion say?