Craigslist Countersues eBay… But Still Doesn't Answer Questions About Diluting eBay

Legal Issues

from the almost,-but-not-quite dept

I’m generally a fan of Craigslist, and think that people all too often blame the company for things it didn’t do. However, I’m still having trouble understanding Craigslist’s position in the legal battle it’s now having with eBay. After getting sued by eBay for unilaterally changing eBay’s ownership percentage, Craigslist has now countersued eBay for a laundry list of things, including: “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.” That’s quite a list, but it doesn’t respond to the key point of eBay’s lawsuit: did Craigslist break the law in changing eBay’s ownership percentage? As Rob Hyndman points out, it really appears that Craigslist is now trying to “accomplish by litigation what it failed to accomplish by business planning and sensible precautions among co-founders when it first issued shares, and by negotiation with eBay when it acquired its interest.”

As for the specific charges filed by Craigslist, it claims that eBay tried to put Kijiji execs on its board (which contradicts what eBay has said). Also, it claims that eBay has bought keyword advertising on sites like Google that were misleading, appearing to look like they came from Craigslist, when they really pointed to eBay or Kijiji. That certainly could be a trademark violation, if true, but hardly excuses the behavior of Craigslist’s board in diluting eBay’s shares. You can certainly see where Craigslist is coming from, and why it’s quite uncomfortable with the relationship with eBay — but the company now seems to be throwing the kitchen sink at eBay, dredging up any kind of complaint it can, without dealing with that core issue of how it diluted eBay’s shares. That only lends more credence to the idea that Craigslist knows what it did was wrong, and is now throwing out all sorts of other complaints to distract from that. It’s like a kid caught with his hand in the cookie jar, who responds by pointing out that his mother who caught him ran a red light when driving home. It may be true, but it’s totally unrelated and doesn’t excuse grabbing the cookie.

Filed Under: dilution, fiscal responsibility, lawsuit
Companies: craigslist, ebay