U.S. to launch criminal inquiry into eBay-Craigslist dispute

U.S. Justice Dept. is to investigate whether eBay 'misappropriated information' from Craigslist to set up its own rival classified advert service.
Written by Zack Whittaker, Contributor

U.S. prosecutors have launched a criminal inquiry into whether eBay 'misappropriated confidential information' from classified advert service Craigslist, in a bid to launch a rival service.

Reuters reported first after the news network had obtained a grand jury subpoena, describing how eBay allegedly used its board seat at the table of Craigslist to acquire confidential information, which went towards building a rival service of its own.

Issued by a federal grand jury in San Jose, California last week on behalf of the U.S. Justice Department, the subpoena requests a wide range of confidential eBay documents, including papers belonging to eBay chairman, Pierre Omidyar and former Skype chief executive Joshua Silverman, who served as the representative to eBay on Craiglist's board.

One of eBay's representatives were 'lawfully removed' from Craiglist's board, after a court ruling n Delaware last year, following the civil court action.

As eBay in 2007 launched classified ad service Kijiji in the U.S. market, the government inquiry will look into whether Kijiji was launched as a result of access to insider information of Craigslist's business model.

It is understood that Omidyar requested information about how Craigslist added new cities to its portfolio, while the subpoena also covers documents relating to "Craigslist management" and, "any insider information about Craigslist management and provided recommendations to the eBay team responsible for the launch of Kijiji".

The two companies have been fighting in civil court for years over these allegations, but has now effectively been bumped for a greater authority.

While eBay said that it would "vigorously defend [itself]", according to a spokesperson, as the e-trading giant would co-operate "fully" in any inquiry, Craigslist declined to comment.


Editorial standards