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eBay, Craigslist Fighting Over Kijiji Competition

Lawsuit exposes competition activity clause

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eBay publicized the complaint it recently filed against Craigslist in Delaware’s Couty of Chancery. It’s all about the lucrative listings market.

A public copy of the eBay complaint, edited to redact certain portions at the request of Craigslist, became available Wednesday. "eBay…takes no position at this time on the propriety of any of Defendants’ redactions," eBay said of those edits.

eBay claimed the two directors for Craigslist, Jim Buckmaster and Craig Newmark, made certain transactions that benefited them to eBay’s detriment. The actual numbers regarding the number of shares and percentages have been redacted out of the complaint.

As part of the agreement that delivered part of Craigslist to eBay, any competitive activity by either side would cause that side to lose certain rights. With eBay bringing its Kijiji listings site to the United States, it seems Craigslist considered this competitive activity.

By the agreement, Craigslist can sell eBay’s "minority, non-control interest" when this takes place. Craigslist became uncomfortable with eBay’s Kijiji forays into the US; in July 2007, they asked eBay CEO Meg Whitman about repurchasing its Craigslist interest, or otherwise finding "a new home for these shares."

Whitman responded by saying eBay would like to acquire the rest of Craigslist whenever Buckmaster and Newmark felt it would be appropriate. Ebay cited industry commentary about Craigslist, pegging its potential value of several billion dollars.

eBay then alleges that in January 2008, Buckmaster and Newmark began to dilute eBay’s stake in the site. Changes made to Craigslist’s bylaws angered eBay, which called the right of first refusal they adopted "a thinly disguised effort to strip eBay" of its right to sell its shares to any other potential buyer.

Court of Chancery will have to wrestle with the competitive interest terms of the agreement between the two sides. If they agree that Kijiji’s operations triggered those terms once eBay opened the site here, eBay stands to lose a lot more of its Craigslist interest.

eBay, Craigslist Fighting Over Kijiji Competition
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  • Sciencefare

    eBay is an evil, arrogant and monopolistic entity that will stop at nothing to perpetuate eBay.

    eBay corralled PayPal, and now uses them to help in it’s efforts to dominate online commerce, everywhere.

    The deceitful, dangerous, questionably legal and increasingly menacing antics of the terrible duo of eBay-PayPal needs to be reined in.

    Donahoe and his gang must be stopped. The angst, anger, and ill will generated by these people is widespread. eBay and PayPal are absolutely out of control.

    My best wishes are with Craigslist. Ill regards to eBay and PayPal.

    -sciencefare

  • Guest

    For what it is worth — I would shut down all "free" portions of Craigslist and Kijiji — the "free" sections of both these sites are full of scam ads which are useless to everyone except the scam artists.

    Sites that charge a small fee to post ads are much better as they carry far fewer bogus ads.

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