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Craigslist, EBay Trial Heats Up

December 3, 2009

The legal battle between online auction site EBay and Web classified company Craigslist is heating up as representatives are set to argue their case in a Delaware state courtroom on Monday.

Former eBay Chief Executive Meg Whitman and Craigslist Founder Craig Newmark are expected to take the stand during the trial to testify on behalf of their respective companies in the lawsuit filed by eBay against Craigslist.

The trial is expected to highlight the differences in business structures between the two widely known Web firms.

According to Reuters, eBay generated $8.5 billion in 2008 revenue with thousands of employees and has recently been making a larger effort to broaden its market beyond its traditional online auctions.

Craigslist holds just a few dozen employees and is widely known for its free online classified services.

In 2008, eBay claimed that Craigslist executives created a “coercive plan” to dilute eBay’s minority stake from 28.4 percent to 24.85 percent, causing eBay to lose its seat on Craigslist’s board.

“We are very confident we acted properly throughout the relationship,” Deputy General Counsel Mary Huser said in an interview. “We were open and honest regarding what we were doing and our intentions.”

One month after eBay filed its suit, Craigslist filed a lawsuit in San Francisco Superior Court on charges of unfair competition, misappropriation of proprietary information, false advertising, trademark infringement among other charges.

Craigslist has claimed that eBay used its seat on its board to gain information to create a competing classified advertising service.

“EBay has unclean hands,” Craigslist said in a pretrial brief.

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