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Craigslist Accuses eBay of Spying

By Reuters  |  Posted 05-14-2008 Print

Craigslist operates with only a few dozen employees. Its headquarters is located in a modest, century-old Victorian house located in a residential neighborhood of San Francisco. It relies on volunteers to run sites in 567 cities worldwide.

They compete directly in the United States and a dozen other countries, with Kijiji tailoring its ads to young families in contrast to Craigslist's open flea-market style.

Craigslist's complaint alleges a plot by San Jose, Calif.-based eBay to use its position as a minority shareholder and its position on the board to pressure Craigslist into a full-scale acquisition deal by eBay.

Barring that, Craigslist argues eBay used its position to gather competitive information that led to the launch of eBay's rival classifieds business. It charges eBay code-named this its "Craigslist killer" in internal strategy discussions.

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

It also alleges eBay used its position on the Craigslist board to pressure the company to provide it with key details of its expansion plans and operating performance.

"Using the pretext that the information was necessary for Craigslist board-related matters, eBay made constant demands for confidential information in excess of what was required for that purpose," Craigslist alleges.

Craigslist has until Monday to respond to eBay's original lawsuit that seeks to protect its minority shareholder rights.

Rubey quoted from Craigslist's own complaint to suggest that both parties recognized that the right of the other to compete with one another. However, the Craigslist lawsuit says eBay would relinquish some rights if it chose to compete with Craigslist on online job listings, its sole source of revenue.

The Craigslist complaint can be found here.



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