Craigslist Counter-Suit Charges eBay Stole Company Information

San Francisco, CA (AHN) - Two popular Internet marketplaces became fully engaged in legal battle this week when classified advertising website Craigslist counter-sued auction site eBay.

In its suit, filed Tuesday in California Superior Court in San Francisco, Craigslist charged that eBay used it position on the Craigslist board of directors to steal confidential company information.

The lawsuit alleges at least 10 violations by eBay, including unfair competition, false advertising, trademark infringement and misappropriation of proprietary information.

Craigslist charged that "throughout its tenure as a Craigslist shareholder, under the guise of shareholder requests for information, eBay has hounded Craigslist with improper demands for confidential information which could be used for anti-competitive purposes; and eBay has used Craigslist's mark and name in commerce to confuse the public and illegally divert internet traffic from Craigslist to eBay and its Kijiji site."

On its blog, Craigslist outlined what the company hopes to happen with the suit: "We respectfully ask the Superior Court in San Francisco to enjoin this conduct and order eBay to (1) make full restitution to craigslist, (2) disgorge their related profits (3) restore to craigslist all shares of the company acquired by means of, or for the purpose of unfair competition, and (4) pay punitive damages for their malicious behavior."

EBay acquired a minority interest in Craigslist in August 2004.

In April, eBay filed suit against Craigslist, alleging that company executives took actions that "unfairly diluted eBay's economic interest by more than 10 percent."

EBay said it was suing Craigslist to "safeguard its four-year financial investment."