Craigslist's turn to sue eBay

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Following the lawsuit filed by eBay against Craigslist for diluting their 28.4% share of the company to below 25%, Craigslist have now sued eBay.

The lawsuit demands that eBay now return all of the outstanding shares to Craigslist as well as a call for punitive damages and profits from the online advertising revenue.

eBay are positioned in the lawsuit as unwelcome minority investors who have abused their position, not only to pressure Craigslist to acquiese to a full acquisition by eBay, but also as planting spies in the form of their nominated director on Craigslist board.

The lawsuit names Josh Silverman, who was responsible for launching Craigslist competitor Kijiji, and his replacement eBay nominee Thomas Jeon, apparently responsible for Kijiji world wide competition policy. Craigslist contend the eBay used its position to gather competitive and proprietary information to divert traffic from Craigslist to eBay companies. This is inspite of the fact that in eBay’s lawsuit they complain that a replacement to the board for Silverman was never accepted.

Craigslist also complain that eBay used adverts on Google using the Craigslist name to direct traffic to Kijiji and eBay.

The question has to be asked if Craigslist were so unhappy with eBay as a shareholder why they have waited so long to sue them. Issuing a complaint and alleging eBay spied on Craigslist in an anticomptitive manner is something that should have occured back in the summer of 2007 if it was a concern.

Having taken steps which appear to have diluted eBays stake in the company and been sued, to then sue eBay alleging they’ve abused their shareholding smacks of tit for tat.



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