U.S. launches criminal probe into eBay-Craigslist dispute

A grand jury is investigating whether eBay executives stole trade secrets while on Craigslist's board

The U.S. Department of Justice has opened an investigation into whether eBay executives broke the law and stole trade secrets while sitting on the board of Craigslist.org.

The investigation is centered on the activities of eBay executives who managed the Craigslist relationship between 2004 and 2007, a period when eBay morphed from a US$30 million Craigslist investor, with a seat on its board of directors, into a direct competitor in the lucrative online classified advertising market.

In a Sept. 7 federal grand jury subpoena sent to Craigslist's law firm, Perkins Coie, investigators asked for documents relating to nine incidents during which eBay executives allegedly asked Craigslist for information that was then used to build out eBay's own classified business. This data includes operational details, information on new cities where Craigslist planned to start operating and financial information on the company, according to the subpoena.

Perkins Coie declined to comment for this story. EBay wouldn't say whether it was aware of the investigation before it was first reported by Reuters on Tuesday, but in an emailed statement, company spokeswoman Amanda Miller said, "We will cooperate in any inquiry related to the disputes between eBay and Craigslist."

The two companies have been slugging it out in civil courts for three years now, but the criminal investigation raises the stakes in this ongoing dispute. "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," Miller said.

The DoJ declined to comment on the investigation, which is being coordinated by U.S. Attorney Melinda Haag in conjunction with the U.S. Federal Bureau of Investigation's Palo Alto, California, office.

Robert McMillan covers computer security and general technology breaking news for The IDG News Service. Follow Robert on Twitter at @bobmcmillan. Robert's e-mail address is robert_mcmillan@idg.com

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Tags internetlegalebayU.S. Department of JusticeInternet-based applications and servicesCriminalCivil lawsuitsCraigslist.org

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Robert McMillan

IDG News Service
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