EcommerceBytes-NewsFlash, Number 2391 - October 14, 2010     0 of 6

Craigslist Sues eBay Founder Pierre Omidyar in Amended Complaint

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Craigslist sued eBay founder and Chairman of the Board Pierre Omidyar along with former eBay executive Josh Silverman, adding them as defendants in its lawsuit against eBay. In its third amended complaint in Craigslist vs. eBay, Craigslist charged Omidyar, Silverman and eBay with disseminating and misusing Craigslist's confidential proprietary competitive information in order to compete unfairly, among other allegations. Craigslist also filed new claims for securities fraud and negligent misrepresentation.

Omidyar had represented eBay on the Board of Craigslist in addition to serving as Chairman of the Board at eBay after it had acquired 28 percent of Craigslist in 2004. Silverman, who took over from Omidyar as eBay's representative on Craigslist's Board, led the development of eBay's European classifieds business. He was later named CEO of Skype, and abruptly stepped down from the company earlier this month.

The lawsuit was filed after eBay had first sued Craigslist in Delaware when Craigslist tried to lock eBay out of its Board, and Craigslist's lawsuit was on hold until the corporate governance lawsuit was wrapped up. Judge Chandler ruled in the Delaware case on September 9, 2010, and said eBay and Craigslist were like oil and water, comparing them to David (Craigslist) and Goliath (eBay). (See the AuctionBytes Blog for details of the ruling.)

The San Francisco Superior Court lifted the stay of Craigslist's lawsuit against eBay after neither side appealed last month's Chancery Court ruling in the first trial.

Testimony from former eBay CEO Meg Whitman, Omidyar, and Silverman in eBay v. Craigslist will no doubt play an important role in the pending Craigslist v. eBay lawsuit.

It's worth noting Craigslist's lawsuit also attempts to remove eBay as a shareholder: "Craigslist has asserted and continues to assert that, under applicable law referenced above, eBay cannot continue to own shares of craigslist, or that if eBay is entitled to remain a shareholder of craigslist, eBay cannot hold those shares for any purpose other than investment."

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About the author:

Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com.


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