Craigslist, eBay square off in San Francisco court

Craigslist, eBay square off in San Francisco court

By Howard Mintz hmintz@mercurynews.com
Posted: 09/16/2011 06:15:35 AM PDT
Updated: 09/16/2011 06:15:55 AM PDT

Escalating their ongoing legal feud, eBay (EBAY) lawyers on Thursday accused Craigslist of "lobbying" for a federal criminal investigation into allegations the San Jose-based online marketplace illegally used confidential information from Craigslist to develop its own rival classified advertising website.

eBay attorneys also asked a San Francisco judge to put an ongoing civil lawsuit between the two companies on hold until an unfolding criminal investigation is resolved, calling the probe a "game changer."
The latest sparring in San Francisco state court came amid revelations this week that a federal grand jury in San Jose is investigating whether eBay officials misappropriated Craigslist's company secrets after eBay bought a stake in the San Francisco online company's business in 2004.
The grand jury subpoenaed records related to the allegations last week, outlining nine "incidents" that prosecutors are exploring in the conflict between the two online powerhouses. This newspaper obtained a copy of the subpoena, which asks for documents related to "incidents where eBay employees engaged in alleged criminal activities and misconduct" related to their relationship with Craigslist.
The subpoena seeks documents connected to the actions of many executives, including eBay co-founder Pierre Omidyar. The allegations mirror closely a lawsuit Craigslist filed against eBay in 2008.

Hearing that case Thursday, San Francisco Superior Court Judge Richard Kramer ordered the two companies to continue cooperating on turning over documents to move the lawsuit forward, despite the criminal probe, but agreed that at least for now he would not allow Craigslist to depose eBay officials. eBay attorney Mark Lambert warned that the grand jury subpoena could put executives in a position where they may need to hire lawyers and assert rights in the case, saying "there is very little clarity on who is affected" by the investigation.
Craigslist officials have declined to comment on the subpoena, and eBay officials have called the Craigslist allegations "without merit."
Contact Howard Mintz at 408-286-0236