Craigslist and eBay fight in court with Kijiji in the middle

As published on E-Commerce Journal:

On Monday next week the legal battle between eBay and Craigslist resumes as a Delaware state court is to conduct a trial which will bring to the witness stand two Internet pioneers: former eBay Chief Executive Meg Whitman and Craigslist founder Craig Newmark.

The issue rotates round eBay's minority ownership in San Francisco's Craigslist. In the lawsuit launched by eBay in April 2008 the company alleges that Newmark and Chief Executive James Buckmaster hatched a "coercive plan" in 2007 and conducted "clandestine transactions" that diluted eBay's stake to 24.85 percent from 28.4 percent. As a result eBay lost its seat on Craigslist's board.



In October 2008 a Delaware Chancery Court judge declined two eBay charges, but five counts including breach of fiduciary duty and issues related to the dilution of eBay's stake remain.

Meantime, Craigslist filed its separate lawsuit against the online auction giant with San Francisco Superior Court a month after eBay sued in Delaware, charging the company with unfair competition, misappropriation of proprietary information, false advertising, trademark infringement and other deceptive practices.

Craigslist alleges that eBay used its position on the board to get the insider information that could be further used for the launch of a competing classified advertising business. The classifieds company claims that eBay bought shares of Craigslist in 2004 with the fear that a rival such as Google Inc might swoop in if it tarried. Meantime eBay ex-CEO Whitman maintained that eBay had no designs on the company, and that Craigslist would become its "play in classifieds."

Yet, Craigslist says that eBay in fact developed its own classified site, Kijiji, which it launched internationally in 2005 and in the United States in 2007.

"If it could not own Craigslist, eBay would exploit its position as an insider and use Craigslist's confidential information, experience, skill and innovations against Craigslist," Craigslist wrote.

Besides, Craigslist accused eBay in stealing its traffic by deploying deceptive tricks. Legal briefs show online ads allegedly paid for by eBay used Craigslist's name but diverted users to Kijiji or eBay.

For more on the story, see E-Commerce Journal or check Google News.

This post was written by: Gord McCord

Gord McCord, webmaster at You Suck at Kijiji, makes fun of funny things on Kijiji. Do not take him too seriously. Also do not take yourself too seriously. Follow him on Twitter