Feds investigating Craigslist complaint against eBay

Subpoena issued on behalf of the Justice Department indicates federal interest in a Craigslist complaint that sensitive data was revealed to an eBay board member, according to a Reuters report.

Elinor Mills Former Staff Writer

Elinor Mills covers Internet security and privacy. She joined CNET News in 2005 after working as a foreign correspondent for Reuters in Portugal and writing for The Industry Standard, the IDG News Service and the Associated Press.

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Elinor Mills

Sept. 13, 2011 4:28 p.m. PT

2 min read

Craigslist's headquarters in San Francisco's Sunset District Greg Sandoval/CNET

The U.S. Justice Department has begun a criminal investigation into unfair competition allegations leveled by Craigslist in ongoing litigation against eBay, according to a Reuters report today.

A subpoena issued by a federal grand jury in San Jose, Calif., last week on behalf of the Department of Justice seeks "an array" of documents and information related to Craiglist's complaint that minority shareholder eBay took advantage of its membership on Craigslist's board to gather sensitive information before eBay launched in March 2005 its own classified service, then called Kijiji but later renamed eBay Classifieds.

"In February 2005, (eBay founder) Pierre Omidyar requested information about Craigslist's approach to adding new cities as well as advance notice of plans to launch in new cities," the subpoena alleged. Reuters said it obtained a copy of the grand jury subpoena.

"We will cooperate in any inquiry related to the disputes between eBay and Craigslist," Amanda Miller, eBay spokeswoman, wrote in an e-mail to CNET. "eBay believes that Craigslist's allegations against eBay are without merit. We will continue to vigorously defend ourselves, and we will aggressively pursue our claims against Craigslist."

Omidyar could not be reached for comment. Jack Gillund, spokesman for the U.S. Attorney's office in Northern California, said his office had no comment on the matter.

Craigslist filed a lawsuit in 2008 asking San Francisco Superior Court to force eBay to surrender its stake in the popular online classifieds company. eBay had earlier sued Craigslist, accusing the firm of unfairly diluting its ownership stake to below 25 percent, which would keep eBay from holding a director's seat on the board. A Delaware judge last year restored eBay's stake to 28.4 percent from 24.85 percent, but dismissed eBay's objection to a provision seeking staggered board elections.

eBay purchased the stake in Craigslist in 2004.