Pando

Documents show how eBay's Meg Whitman and Pierre Omidyar conspired to steal Craigslist's secrets

By Mark Ames , written on December 1, 2014

From The News Desk

“[Pierre Omidyar] would not start a new business in order to make money. He would only start a new business for some goal, some civic-minded goal.”

—Glenn Greenwald, Democracy Now

“The conduct of ... [Pierre] Omidyar ... particularly insofar as it was carried out by a member of the craigslist Board owing fiduciary duties to the company, was malicious, fraudulent, oppressive and was, on information and belief, carried out with a willful and conscious disregard of the rights of craigslist and California consumers.”

Craigslist v. eBay Pierre Omidyar has had a rough few weeks.

For months, Pando has been reporting on signs of trouble at First Look Media, the quarter billion dollar journalism outfit founded by Omidyar in 2013. Then, in October, after months of denials by First Look staffers, all hell finally broke loose at the startup with high profile resignations, layoffs and confirmation of widespread mismanagement and newsroom interference by Omidyar and his lieutenants.

But while everyone was focused on First Look's October implosion, Omidyar was facing a far more serious threat to his image as technology's most "civic minded" billionaire. In August, attorneys for classified site Craigslist filed their latest complaint in a years-long legal fight in which Craigslist claims Omidyar and other eBay executives plotted to steal trade secrets in order to launch their own rival classifieds sites.

The ongoing civil suit outlines fourteen separate allegations against the company including accusing eBay, Omidyar and senior eBay executive Josh Silverman of committing fraud, deceit, misrepresentation, breach of fiduciary duty, and a host of other violations.

Long-time Valley-watchers might think they know this story already. In fact, the ongoing battles between Craigslist and eBay have been badly misreported, and underreported. That reporting has also left unanswered one important question: Who is the real Pierre Omidyar? The civic-minded genius? The naive idealist? Or something entirely more machiavellian?

Only by digging through the piles of documents generated during the years-long legal fight between the two companies, can we start to answer these questions and understand the full story: How eBay executives, including CEO Meg Whitman, were able to use Pierre Omidyar's image as a friendly -- almost hippy-ish -- billionaire to fool Craigslist into handing over their deepest trade secrets. Trade secrets which eBay later used to build its own rival site, which they tastelessly dubbed the "Craigslist Killer." (Key documents cited in this article are embedded below.)

It is, in the words of a Delaware court judge, a classic case of David vs. Goliath, with eBay as the Goliath, and Pierre Omidyar as the central figure in a conspiracy to usurp the beloved low-fi classifieds website and monetize it for eBay's -- and largest shareholder Omidyar's -- profit.

It is also a story, for Omidyar at least, of enormous good fortune. On September 7, 2011, a federal grand jury issued subpoenas naming Omidyar along with other executives as part of an ongoing Department of Justice investigation into suspected criminal activity in eBay’s covert campaign to unfairly compete against Craigslist. Details of the subpoenas were leaked to the press and were reported by both Reuters and the San Jose Mercury News.

As the world learned last week, America's federal grand juries generally act as rubber stamp committees for federal prosecutors, with almost every grand jury resulting in indictment. Out of 162,000 cases prosecuted by federal attorneys in the year beginning October 1, 2009 and ending September 30, 2010, federal grand juries only declined to bring indictments in 11 cases. That works out to about a 99.9% indictment rate for federal grand juries. And yet, more than three years after subpoenas were issued, no criminal charges have been brought against Omidyar or anyone else at eBay.

[A Department of Justice official declined to comment on the investigation, referring Pando "without referencing this matter directly" to DOJ rules regarding disclosure of information concerning ongoing investigations. An eBay spokesperson said the company “will cooperate in any inquiry related to the disputes between eBay and craigslist," adding "eBay believes that Craigslist’s claims against eBay are without merit.” eBay's full statement is below.]

To understand the whole story, you have to go back  to early 2004, when one of the three shareholders in Craigslist was looking to sell his minority stake in the company. The buyer had to be someone or some company that shared the same unusually a-capitalist values as the other two shareholders in Craigslist, Craig Newmark and Jim Buckmaster. For Newmark and Buckmaster, the driving motivation of Craigslist has always been about community and idealism, not profits. By contrast, eBay wanted that minority stake in Craigslist in order to launch their own very-much-for-profit classifieds site, which would later become known as "Kijiji." But they knew that the only way to get a hold of that minority stake in Craigslist was to conceal their true motives, and somehow make Newmark and Buckmaster believe that eBay shared their values.

Enter eBay founder and chairman Pierre Omidyar. As early as May 2004, court documents allege, eBay's executives understood that Omidyar was their best and stealthiest weapon vis-a-vis Craigslist. The founder's disarming demeanor and New Age cant about “values” and “community” was exactly the sort of thing Craigslist’s two legendary founders, Craig Newmark and Jim Buckmaster, wanted to hear. Omidyar could convincingly talk the Craigslist talk, even though in reality he walked the Big Tech billionaire walk.

Omidyar told them all the things they wanted to hear and the Craigslist team was so impressed that Newmark and Buckmaster insisted that Omidyar be placed on craigslist’s board of directors, giving Omidyar and his appointed agents access to confidential information about craigslist’s trade and financial secrets.

According to Craiglist’s most recent complaint, filed in August of this year,

“eBay recruited Omidyar to induce Newmark to accept eBay as a shareholder. On June 19, 2004, Omidyar met with Newmark to convince him that eBay shared the same community values as craigslist.

“After the meeting, Omidyar reported back to [eBay executive Garrett] Price that he did not think he raised any ‘red flags’ in Newmark's mind. As a result of Omidyar's assurances, Newmark trusted that eBay shared the same community values as craigslist.” Screen Shot 2014-11-30 at 7.46.41 AMWhat Omidyar and eBay knew even at that early stage—but didn’t reveal to Newmark or Buckmaster—was that eBay was already working on something called “P168”, codenamed “Craigslist killer” in internal strategy discussions: a fully-monetized classifieds business designed to boost eBay’s flagging profits.

Putting Omidyar on Craigslist's board gave eBay two options for taking control of online classifieds: Either as a platform for Omidyar to convince Craigslist to sell out all of its shares to eBay; or a choice insider position allowing Omidyar and eBay to steal Craigslist's secrets for eBay's own proprietary online classifieds subdivision.

Paraphrasing an eBay executive's email from late 2004, the Delaware judge wrote:

"eBay executives calculated that the eBay-craigslist relationship would at least provide them with an opportunity to learn the 'secret sauce' of craigslist’s success, presumably so that eBay could spread that sauce all over its own competing classifieds site."
Omidyar turned out to be absolutely correct when he privately boasted to his eBay colleagues during early negotiations that he’d won over Craigslist’s owners without raising “red flags.” In Craigslist’s complaint, they note,
“As a result of Omidyar’s assurances, Newmark trusted that eBay shared the same community values as craigslist.”
But eBay didn't wait for Omidyar to take his seat on the board before appropriating Craigslist's secrets and passing them around.

In the spring of 2004, Craigslist and eBay entered into negotiations under a signed nondisclosure agreement. During this period, with the NDA signed and negotiations ongoing, eBay’s lead acquisition exec, Garrett Price, requested access to Craigslist’s confidential financial and site metrics data “for the stated purpose of evaluating eBay’s potential purchase.” Buckmaster agreed, providing eBay with full privileged access to Craigslist’s servers, unaware that eBay used that access to suck up some 20,000 pages of data to use for their secret “Craigslist killer” project. Buckmaster and Newmark had two good reasons to believe that wouldn’t happen: Omidyar’s word, and the legally-enforceable NDA they’d signed.

During the summer of 2004, in the heat of negotiations, Craigslist’s co-owners suddenly got cold feet with eBay and broke off talks. The lead acquisition executive from eBay, Garrett Price, had begun pushing hard for a deal allowing eBay to take full control of Craigslist, which was exactly what they didn't want. It was also contrary to what they'd been led to believe in their meeting with Omidyar—who'd convinced Craigslist's co-owners that they could trust him, that eBay wanted only to work as partners, helping Craigslist expand throughout the world, sharing each other's community networks and spreading their values—with "far-reaching positive implications for humanity," as Newmark would later describe his partnership with Omidyar.

The eBay-Craigslist deal was all but dead in late July 2004 when CEO Whitman asked Omidyar to lay it on, thicker than ever: more community, more values, more do-gooder than ever before. And Omidyar delivered.

A reporter who watched Whitman’s 2009 testimony in the Delaware trial wrote:

“Meg Whitman, CEO at the time, testified that she asked Pierre Omidyar to smooth-talk Newmark after negotiations had broken down. Omidyar had cultivated an image as just-a-software-developer-who-got-lucky with philanthropic interests, and Whitman believed that would appeal to Newmark.

"Apparently, it did.” Omidyar was so effective in wooing Craigslist, that Whitman's own negotiating strategy essentially came down to repeating Omidyar's name and his various New Age mantras, as described in Craigslist’s complaint in the San Francisco civil fraud suit:

“[Whitman] emphasized that eBay espoused very high values and pointed to the ‘Code of Conduct’ created by eBay’s founder, Pierre Omidyar, which at that time was featured prominently on the eBay website.

“Mr. Newmark and Mr. Buckmaster were impressed by Ms. Whitman’s presentation; most notably the importance to eBay of its community and eBay’s dedication to Pierre Omidyar’s Community Values — particularly the values that ‘We believe that people are basically good’; ‘we believe that an honest, open environment can bring out the best in people’ and ‘We encourage you to treat others the way you want to be treated.’ These were very similar to craigslist’s own principles and, in reliance on eBay’s expressed commitment to these principles, along with Ms. Whitman’s representations, craigslist agreed to resume discussions." It worked. Craigslist came back to the negotiating table, and they quickly rammed through a deal. In August 2004, just two days before the eBay-Craigslist deal was sealed, both Newmark and Buckmaster reiterated again that it was Omidyar who won them over—their “shared community values” and “Mr. Omidyar’s laudable philanthropic activities.”

In an email to Whitman on the eve of the sale, Craigslist co-founder, Jim Buckmaster requested that their favorite eBay executive, Pierre Omidyar, serve as eBay’s representative on craigslist’s board:Screen Shot 2014-11-30 at 3.06.55 AM

“in addition to sending the strongest possible positive message to the craigslist community, the idea of having pierre and craig on the same board is extremely exciting, and i don’t think that i exaggerate in suggesting that the ensuing collaboration could have far-reaching positive implications for humanity, not-to-mention our respective organizations and communities.

“i should also mention that craig has immense respect for pierre, and it would mean a lot to him personally to have such a giant and pioneer of online community working with us at craigslist in this capacity.” In fact, over the next several months, Omidyar and his appointed eBay agent, Garrett Price, took confidential Craigslist data and secretly handed it to eBay’s employees who were developing Kijiji. Meanwhile, eBay was also reportedly “scraping” data from Craigslist’s site — remotely extracting data — against both Craigslist’s Terms of Use, and against Craigslist’s knowledge and wishes.

In one instance, during a February 2005 craigslist board meeting, Omidyar asked Buckmaster to provide him with strategic information about how Craigslist decides which new cities to enter, as well as a list of cities they planned to enter. By this time, eBay was well along the way to introducing their overseas version of Kijiji. Buckmaster complied with Omidyar’s requests and provided him with the confidential materials.

Shortly after Kijiji launched in overseas markets in February 2005, Omidyar emailed Price and another eBay employee, Alex Kazim, instructing them “to compare initial growth rates of craigslist versus kijiji where we’re in the same cities (grrr...).” Craigslist was unaware that their own board member, Omidyar, was passing along this confidential information to eBay.

The next month, March 2005, Omidyar’s personally-appointed agent to Craigslist, Garrett Price, told Buckmaster that Omidyar wanted more data:

“Pierre would ideally like to see the operating metrics and financial data presented in a unified presentation format that he is used to seeing.”
That same day, another eBay employee working under Price, Mike Reining, shared by email with select eBay colleagues confidential Craigslist data, warning them to be careful not to let anyone else know:
“I just got the Feb 05 listing data from Jim [Buckmaster], so I was able to derive the YoY listings growth rates for craigslist and wanted to share that with you. Please do not distribute this without checking with Garrett [Price] first. Not sure how widely we want to broadcast this.”
A few days after that, Buckmaster allowed what he described as “two agents for Omidyar” — Price and Reining — to spend two afternoons in Craigslist’s offices accessing Craigslist’s servers. Reining “obtained large compilations of craigslist financial and site metrics data,” which he assured Buckmaster was only to “help you have a more productive meeting with Pierre.”

These last incidents were among several that later caught the attention of federal prosecutors. According to a 2011 federal grand jury subpoena, in 2005, “Omidyar requested information about Craigslist's approach to adding new cities as well as advance notice of plans to launch in new cities.”

The subpoena asked for documents and information relating to that request from Omidyar, along with “instructions from Omidyar to other eBay executives to use Craiglist’s ‘metrics’ to compare its growth rate to Kijiji,” according to a San Jose Mercury reporter who obtained a leaked copy of the federal subpoena. The subpoena also alleged that Omidyar and other eBay executives who served on Craigslist’s board or participated in board meetings “engaged in activities which were in direct breach of their fiduciary duties.”

This pattern of eBay taking Craigslist’s “secret sauce” and misappropriating it to eBay’s advantage continued after Kijiji rolled out in Europe, unabated.

At the end of 2005, Omidyar stepped down from Craigslist’s board, and eBay named Josh Silverman as Omidyar's replacement. Incredibly, during the Delaware trial in 2009-10, Omidyar complained that Craigslist had mistreated him:

“I was never trusted and my counsel was never sought.”
What “counsel” did Omidyar offer? At the February 2005 board meeting that Omidyar attended as eBay’s representative, Craigslist was told:
“it is critical for the craigslist-eBay relationship that eBay DNA becomes a part of craigslist and vice versa.”
This, of course, is the very opposite of what Craigslist had wanted from eBay, and from what they had been led to believe by Omidyar during negotiations. What Omidyar, Whitman and the others really wanted was to own and control Craigslist.

Even before Omidyar stepped down from Craigslist’s board, his appointed agent, Garrett Price, started bullying Craigslist’s owners. In an email to Buckmaster, Price wrote that Craiglist was “driving [eBay’s] execs (especially Meg) to distraction.” He told Buckmaster that eBay’s takeover was “inevitable” and that Craigslist needed to accept their fate, telling “Buckmaster that he and Newmark were mortal, but eBay was not, and eBay would acquire 100 percent of craigslist whether it took decades and, if necessary, over Newmark’s and Buckmaster’s dead bodies.”

Buckmaster replied by reminding Price that when they negotiated the sale of their stake, eBay had agreed to abide by a three-year “courtship period” during which time, if Craigslist felt their two cultures were incompatible, eBay had agreed it would sell back its shares.

Price’s response to Buckmaster:

“that was then, this is now.”
Price also warned Buckmaster in 2005 to beware of Meg Whitman’s wrath, saying there were two Meg Whitmans — “the good Meg” and “the evil Meg [who] could be a monster when she got angry and frustrated.”

Josh Silverman, the eBay executive who replaced Omidyar on Craigslist's board, was at least as bad when it came to pilfering and passing around confidential Craigslist data to eBay employees. The main difference was in their forms of aggression: Omidyar, the consummate passive-aggressive predator; Silverman, the caricatured corporate alpha predator. So while Omidyar complained on the Delaware witness stand about how Craigslist hurt his feelings, Silverman's testimony amounted to telling the judge how much he continued to despise Newmark and Buckmaster for refusing to "monetize" Craigslist.

Indeed it's clear that just about everyone at the executive level at eBay utterly despised Craigslist for all the things that most people find endearing about Craigslist. Internal eBay emails mocked Craigslist for holding "amateurish board meetings" while others mocked Craigslist's employees for not knowing Microsoft PowerPoint, describing them as "definitely from another planet."

Contempt and plunder go hand in hand. Among the many eBay executives accused of pilfering Craigslist secrets and passing them on to eBay employees is eBay's very own in-house counsel, Brian Levey. In March 2007, Levey attended a Craigslist board meeting alongside Silverman; shortly afterwards, Levey emailed the confidential Craigslist budget data to an eBay employee, with a note that read:

“Here are the numbers for [c]raigslist’s 2007 financial plan. Look at all that cash! Please pass along to whomever on a need-to-know basis. Thx!"
During the Delaware trial two years later, Levey testified about his role in acquiring Craigslist's secrets:
Q. You took confidential craigslist information and you gave it to the people at eBay that were planning to launch Kijiji in the United States in the spring of 2007, didn’t you?

"Levey: Yes.” It bears repeating: That's eBay's in-house counsel talking.

In June 2007, eBay stunned their Craigslist partners by launching Kijiji in the United States as a direct competitor with Craigslist.

Craigslist immediately sent their eBay minority partner a Notice of Competitive Activity, and the eBay executive who replaced Omidyar on Craigslist’s board, Josh Silverman, agreed to step down.

Buckmaster sent an astonishingly polite email to Meg Whitman on July 12, 2007, titled “Our Thoughts” — informing eBay’s CEO that the two parties would have to part ways now. And as per their agreement, Buckmaster asked Whitman to divest eBay’s stake in Craigslist:

Although we do not think in terms of competition, eBay clearly does — which of course is perfectly fine generally speaking, but does not feel right coming from a large shareholder privy to our financial and other confidential information.

So while our great esteem for and gratitude toward you, Pierre, and eBay remain unchanged, it is my sad duty to report that we are no longer comfortable having eBay as a shareholder, and wish to explore options for our repurchase, or for otherwise finding a new home for these shares.

A key consideration in our evaluation of eBay as a potential shareholder was the oft-repeated reassurance that you folks were not interested in being involved with craigslist unless we were completely comfortable with eBay as a shareholder. Another critical factor was your personal assurance to us, should we find ourselves at odds someday, that the ability to gracefully unwind the relationship was essential,

Given what we know of the renowned eBay values, e.g. "We encourage you to treat others the way you want to be treated," we are hopeful that you will put yourself in our shoes, consider our request in a spirit of stewardship toward the craigslist community, and work with us toward an amicable parting of ways beneficial to both of our communities.

Very Best Regards,

Jim Buckmaster Whitman didn’t respond.

But one eBay executive who saw Buckmaster’s email quipped,

“[n]ot a dry eye in the house.”
After waiting for a response from Whitman or eBay and getting nothing, Craigslist’s outside counsel decided to phone eBay’s in-house counsel, Brian Levey, to ask him how Whitman reacted to Buckmaster’s request that eBay sell back its shares.

The eBay laywer, Levey, responded:

“How would Jim [Buckmaster] and Craig [Newmark] react if Whitman told them to go ‘pound sand’?”
Nearly two weeks later, in late July, 2007, Whitman finally responded by email, with all the warmth of a crocodile:

Whitman email 2007 Screen Shot 2014-11-30 at 2.24.11 AM

Dear Jim,

Thanks so much for your note and your kind words for Pierre and me. Needless to say, I feel the same way about you, Craig, and the craigslist community.

In fact, we are so happy with our relationship with craigslist, that we could neither imagine doing anything to disturb our personal rapport with you or Craig nor parting with our shareholding in craigslist, Inc. under any foreseeable circumstances. Quite to the contrary, we would welcome the opportunity to acquire the remainder of craigslist, Inc. we do not already own whenever you and Craig feel it would be appropriate. At the end of her email, Whitman all but mocked Buckmaster by invoking eBay’s integrity. She also assured him that he had nothing to worry about when it came to eBay stealing Craigslist’s secrets:

In keeping with the emphasis our culture places on integrity, we have already taken even further steps to completely firewall off the operations relating to our Kijiji offering in the U.S. from the corporate management of our investment in craigslist, Inc. Hence, more than ever, we feel we should, as we have unfortunately been unable to do to date, together leverage the myriad assets in the global eBay Inc. family to provide the craigslist community with the best possible user experience.

Warmest Regards,

Meg The viciousness of Whitman's response was not lost on anyone, including the Delaware judge, who wrote in his decision:

"Jim and Craig interpreted this as Whitman’s way of telling them to go 'pound sand.'"
Days later, Buckmaster was interviewed in Fortune magazine about his relationship with eBay now that they were competitors, and somehow Buckmaster managed to remain human about it all:
“Those issues are obviously a concern, but our first instinct is to trust eBay...”
Not so the playground bullies at eBay. According to emails revealed in the lawsuits, Whitman emailed eBay exec Garrett Price that she found Buckmaster’s response in Fortune “pretty funny.”

Price emailed back: “[y]es, I am glad to read that he trusts us.”

To which Whitman responded with a smiley:

“Love this. :)”
Whitman smiley Screen Shot 2014-11-30 at 2.18.36 AM

Even after the launch of Kijiji in the US, eBay apparently continued to demand confidential data from Craigslist, and to sabotage their business. For instance, according to the complaint, eBay used deceptive advertising on Google to steer Craigslist users to Kijiji by placing Google Ads advertising “Craigslist” ads to those searching for Craiglist through Google—ads which, when clicked, directed the user instead to Kijiji.

With eBay refusing to divest its shares after launching Kijiji stateside, Craigslist took unilateral action and squeezed eBay off their board by diluting eBay’s shares from 28.4% to just under 25%. That sparked a pair of lawsuits in 2008: eBay filed a corporate governance lawsuit in Delaware against Craigslist seeking to restore their board seat and their watered-down shares; and Craigslist filed a civil fraud lawsuit against eBay—later pinning Omidyar's name to the top of the suit—in San Francisco, a case that is still ongoing.

The first lawsuit to go to trial was eBay’s corporate governance suit against Craigslist in Delaware, the most corporate-friendly state in the union. One can see how eBay's lawyers assumed they'd destroy Craigslist in a friendly Delaware court but testimony during the trial by Omidyar, Whitman and other eBay executives managed to shock just about everyone, including the Delaware judge presiding over the case.

In September 2010, that case was decided—and badly misreported in the media at the time as a “victory” for eBay. While it’s true that the Delaware court restored eBay’s diluted shares so that its stake in Craigslist was once again over 25%, the judge denied eBay what it really wanted from that 25%-plus stake: its seat on Craigslist's board, which would once again give eBay privileged access to Craigslist’s confidential information.

Considering that Delaware is known for its friendliness to American business, the judge’s 91-page decision makes for an interesting and surprising read: The judge was clearly sympathetic to Craigslist’s corporate idealism and principles, and appalled by Omidyar’s, Meg Whitman’s and other eBay executives’ flagrant deceptions.

First, describing Craigslist's model, Delaware Chancellor William Chandler III wrote:

"For most of its history, craigslist has not focused on 'monetizing' its site. The relatively small amount of monetization craigslist has pursued (for select job postings and apartment listings) does not approach what many craigslist competitors would consider an optimal or even minimally acceptable level. Nevertheless, craigslist’s unique business strategy continues to be successful, even if it does run counter to the strategies used by the titans of online commerce. Thus far, no competing site has been able to dislodge craigslist from its perch atop the pile of most-used online classifieds sites in the United States."
Then he contrasted the two companies:
“It might be said that ‘eBay’ is a moniker for monetization, and that ‘craigslist’ is anything but.

“eBay’s goal was always to capitalize on the ‘tremendous untapped monetization potential’ of craigslist, but craigslist’s goal was to grow its business by continuing along its (primarily) free-listings trajectory." In his testimony during the Delaware trial, Omidyar admitted that his role was to grease eBay's unfriendly takeover by playing the role of Craigslist's bestest and most trustworthy friend:

"Omidyar decided to join the board, viewing his role as 'facilitating the relationship . . . between craigslist and eBay, help[ing] craigslist see the value of having eBay as a partner, and ultimately [getting] that relationship . . . closer and closer so that [eBay] would end up in an acquisition[.]' Omidyar understood that the 'long-term plan' was for eBay to acquire craigslist."
As awful as Meg Whitman and some of her colleagues come off in the court documents, gloating like Mr. Burns over her do-gooder Craigslist victims, the real villain, at least as far as Craigslist's lawsuit is concerned, is Pierre Omidyar. Their lawsuit against eBay only added two names to the top: Pierre Omidyar, and his appointed replacement, Joshua Silverman. But it's Omidyar who did the damage. Because unlike the cartoon villains like Whitman and Levey, it was Omiydar who was supposed to be the "exception."

 *     *     *

"Mr. Newmark and Mr. Buckmaster were taken aback by eBay's behavior, and feared that they had a wolf in sheep's clothing in their midst. However, they still had tremendous respect for the moral compass of Mr. Omidyar, and craigslist tried to review in good faith even extreme proposals made by eBay, particularly since many of the proposals were couched in terms of community service."

—Craigslist v eBay, Fourth Amended Complaint

 

In 2011, a year after Craigslist’s lawsuit against eBay went into full swing, a federal grand jury subpoena naming Omidyar and other eBay executives was leaked to some members of the press. As Reuters reported at the time, the striking thing about the federal prosecutors’ criminal investigation into Omidyar et al was how “[m]any of the requests in the subpoena match word for word language in [the] civil lawsuit filed by Craigslist against eBay.”

In other words, federal prosecutors—like the Delaware court judge—were also remarkably sympathetic to Craigslist’s case against eBay.

The federal grand jury subpoenas, quoted in court dockets in the civil suit against eBay, sought documents involving “incidents where eBay employees engaged in criminal activities and misconduct focused around the misappropriation of proprietary/confidential information from craigslist.”

Screen Shot 2014-11-29 at 7.20.53 PM

One of the dozens of requests in the federal grand jury subpoena read:

"In February 2005, Pierre Omidyar requested information about Craigslist's approach to adding new cities as well as advance notice of plans to launch in new cities.”
Elsewhere the federal grand jury subpoena accused Omidyar and other eBay executives of having “engaged in activities which were in direct breach of their fiduciary duties.”

Craigslist added Omidyar’s name to their civil suit against eBay in 2010, just after the Delaware court's decision. Over time Craigslist's lawsuit has added more and more charges, fourteen by last count including fraud, deceit, misrepresentation and breach of fiduciary duty.

Three years after the federal grand jury issued its subpoenas against Omidyar and his eBay colleagues, no criminal indictment has yet been returned.

...

We contacted eBay for comment prior to publishing this story. A spokesperson responded with this statement:

eBay will cooperate in any inquiry related to the disputes between eBay and craigslist. Issues between eBay and Craigslist have been litigated in Delaware, with the court generally ruling in eBay's favor and restoring our equity stake in craigslist. Craigslist and eBay are currently pursuing civil claims against each other in California courts.  Craigslist asserted allegations of misconduct against eBay as a defense in the Delaware case, but the Delaware Court did not rule in Craigslist’s favor on the defense.  eBay believes that Craigslist’s claims against eBay are without merit. We will continue to vigorously defend ourselves, and we will aggressively pursue our claims against craigslist.

   

Delaware Ebay v Newmark (#3705) Opinion (9!9!10)

Craigslist v EBay 4th Complaint Complete 2014