Thursday, May 29, 2008

Craiglist counter-sues eBay!

Ken Stahl
May 29, 2008

Craigslist counter-sues eBay!
By Laurie J. Flynn
Published: May 14, 2008

Article Summary

Craigslist, the online classified ad company, has filed a countersuit against its minority owner, eBay, accusing it of unfair competition, false advertising, trademark infringement and diluting the value of the Craigslist trademark.

The countersuit exposes how the tension between the companies has been growing since shortly after eBay's 2004 purchase of a 28.4 percent interest in Craigslist.

In its suit, Craigslist asks the court to restore eBay's holdings to Craigslist.

The company has also accused eBay of "business interference, false advertising, phishing attacks, free-riding" and other misdeeds.

Craigslist said that while the two companies agreed that eBay's interest in Craigslist would not preclude them from competing, eBay misused its minority ownership of Craigslist to access to company information and then use it to compete unfairly.

Craigslist contends that eBay used its shareholder status to plant on Craigslist's board the company officials who had responsibility for a competing site, Kijiji.com.

Craigslist added, "Under the guise of shareholder requests for information, eBay has hounded Craigslist with improper demands for confidential Craigslist information, which could be used for anticompetitive purposes."

Craigslist also accused eBay of diluting the value of the Craigslist trademark by diverting customers looking for Craigslist to the Kijiji site.

Craigslist's suit says that eBay placed misleading advertising on Google.com intended to direct users to Kijiji. Inside eBay, the suit contends, Kijiji is known as the "Craigslist killer."

On several occasions, Meg Whitman, eBay's former chief executive and a member of the board, expressed an interest in acquiring the remainder of Craigslist, the suit contended. The suit also says that after buying a Dutch classified ad site for $290 million, an eBay official asked Craigslist executives, "What do you think we would pay for the largest classified ad site in the United States?"

http://www.iht.com/articles/2008/05/14/technology/ebay.php

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Brief Overview

In this article, to follow up with my the prior case “Ebay slaps a lawsuit on Craigslist”, it looks as if Craigslist has fair reason to counter-sue. The main point that Craigslist is driving home is that “eBay misused its minority ownership of Craigslist to access to company information and then use it to compete unfairly”. It goes on to say that eBay soley bought the shares of Craigslist so that they could actually bring board members of Kijiji.com into Craiglist to demand confidential information, and use it for “anticompetitive purposes”.

Relevance

This article describes two companies that are both located online. Neither company has a retail outlet or a local market location, but only a facility where the corporate employees work, like every company does. Also like any company, they do have shareholders that would like to keep the company in its best interest, financially speaking. However, in the case of eBay and Craigslist, eBay has attained shares of Craigslist, whom suspect if eBay has done so with questionable objectives. Craigslist feels that eBay is seeking a power portal, a way to control the company form within, and bring them down as a competitor. These are two power companies of the United States. EBay are markers for sellers, as well as Craigslist. The public does utilize both of these avenues for marketing their own products in services for profitability. Just what we need, is for them to go to war.

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