DOJ Launches eBay Probe Over Craigslist Spat

Did eBay steal confidential information?

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U.S. investigators have launched a criminal probe into whether eBay employees misappropriated confidential information from Craigslist to develop a competing service, the Wall Street Journal reports.

According to a grand jury subpoena issued last week, the U.S. Justice Department is looking for documents including emails and board meeting notes proving that eBay employees acquired confidential financial information and operating metrics “belonging to Craigslist under false pretense and provided it to a third party.”

In a statement, an eBay spokesperson said, “We will cooperate in any inquiry related to the disputes between eBay and Craigslist. EBay believes that Craigslist's allegations against eBay are without merit.”

Back in 2004 eBay bought a $32 million minority stake in Craigslist and obtained a seat on the company's board. But the relationship between the companies has been on the rocks since 2008, when eBay sued Craigslist for diluting its ownership stake. Craigslist then filed its own lawsuit, claiming that eBay had used its stake to steal business information for its own rival classifieds site.

Last week’s subpoena alleges that eBay employees, including founder and Chairman Pierre Omidyar, “engaged in activities which were in direct breach of their fiduciary duties” while involved with Craigslist’s board.

@adweekemma Emma Bazilian is Adweek's features editor.