eBay Employees Under DOJ Scrutiny
September 14, 2011

eBay Employees Under DOJ Scrutiny


A Department of Justice investigation was revealed yesterday by the Associated Press about whether employees of eBay “engaged in alleged criminal activities and misconduct focused around the misappropriation of proprietary/confidential information from Craigslist.”

Craigslist and eBay have been in and out of civil court for years with allegations that the online auction giant, who bought a stake in Craigslist in 2004, misappropriated confidential information while it secretly planned its own classifieds site.

In March 2007, without Craigslist´s knowledge or consent, eBay´s deputy general counsel, Brian Levey, forwarded Craigslist´s confidential financial information from 2004 and 2007 to a team starting eBay´s online classified ad site which went online later that year, Bloomberg is reporting.

The subpoena seeks information regarding eBay founder and Chairman Pierre Omidyar and Joshua Silverman, the former Skype chief executive who served as eBay´s representative on Craigslist´s board.

EBay spokeswoman, Amanda Miller, explained that the company would cooperate in any inquiry related to the disputes with Craigslist. “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.”

Last September, a judge ruled that Craigslist founder Craig Newmark and CEO Jim Buckmaster violated their responsibilities to eBay with antitakeover measures they implemented. The moves diluted eBay´s share prices making it harder for eBay to sell the stake.

San Francisco-based Craigslist adopted the measures in 2008 after deciding its stake holder had become a business threat instead of a partner, the Washington Post reports. Buckmaster testified in the trial that after starting its own classifieds site in the US, eBay placed online ads steering users looking for Craigslist to its own sites.

Craigslist then counter-sued EBay in state court in San Francisco alleging breach of contract, breach of fiduciary duty, negligent misrepresentation and violation of California securities law. Denying wrongdoing, eBay claims Craigslist breached terms of a shareholders´ agreement between the two companies.

As of yesterday, it was not clear how many companies or individuals have received subpoenas, and no one has been charged with any criminal wrongdoing, Reuters reports.


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