Craigslist counters eBay's suit tenfold

After eBay sued Craigslist, accusing it of manipulating its stock holdings to dilute eBay's minority interest in the online classified service, Craigslist countersued yesterday, citing ten ways eBay has wronged it.

Yesterday, Craigslist filed suit against eBay in California Superior Court, San Francisco, asking for punitive damages, full restitution and disgorgement of profits, and for eBay to return shares acquired as leverage for unfair competition. Failing those, it's asking the court to force eBay to divest itself completely from Craigslist.

As announced in Craigslist's blog yesterday, the countersuit (PDF available here) charges eBay with the following ten counts: "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."

According to Craigslist, eBay's most egregious anti-competitive action was launching Kijiji, a service nearly identical to Craigslist, in the US. The countersuit notes that within eBay, the site was referred to as the "Craigslist Killer," and alleges that the individuals eBay was attempting to plant on Craigslist's board were Kijiji insiders.

The original suit from eBay accused Craigslist's heads Craig Newmark and Jim Buckmaster of acting as a cabal, issuing one another additional shares in the company to drive down eBay's minority stake and thereby block them from putting anyone on the company's board.

eBay naturally dismisses Craigslist's charges as "unfounded and unsubstantiated claims" meant to divert attention away from what it characterizes as the unjust action it took against eBay.