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eBay, Craigslist sue each other alleging breach of agreement

Online auction company eBay recently filed a lawsuit against online classifieds company Craigslist, alleging that Craigslist had tried to dilute eBays’s 28.4 per cent stake in the company to 24.85 per cent. Now, Craigslist has countersued eBay claiming that eBay attempted to repeal competition by using privileges and information gleaned from its stake in Craigslist to benefit its own classifieds site Kijiji.

Online auction company eBay recently filed a lawsuit against online classifieds company Craigslist, alleging that Craigslist had tried to dilute eBays’s 28.4 per cent stake in the company to 24.85 per cent. Now, Craigslist has countersued eBay claiming that eBay attempted to repeal competition by using privileges and information gleaned from its stake in Craigslist to benefit its own classifieds site Kijiji.

In 2004, eBay had acquired a minority stake in Craigslist as part of a strategy to buy up classified advertising services both in US and Europe. Under the deal, both the companies agreed that if either of the two tried to compete against each other, each company may exercise the right to sell shares without a Right to First Refusal.

Craigslist says eBay triggered that provision when it launched its classifieds site Kijiji. However, eBay has said all the allegations made by Craigslist are unfounded and unsubstantiated. eBay also claims that Craigslist is trying to divert attention from eBay’s lawsuit. eBay launched Kijiji in Europe and Asia in 2005 and in US in 2007. [Source: Yahoo News]

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