Craiglist has hit back strongly at eBay with a counter lawsuit after the eBay lawsuit against Craiglist filed two weeks ago. The eBay lawsuit claimed that Craiglist employees took steps that unfairly compromised eBay in an economic manner. Craiglist canceled some eBay rights after eBay decided to push its free classified service Kijiji in the US market. Cariglist views Kijiji as direct competition.

In its counter-lawsuit, Craiglist accuses eBay of pretty much everything that constitutes unfair business - it only stops short of kidnapping for ransom and murder. Here’s a snippet of the Craiglist lawsuit -

unlawful and unfair competition, misappropriation of proprietary information, deceptive passing-off, business interference, false advertising, phishing attacks, free-riding, trademark infringement, trademark dilution, and breaches of fiduciary duty.

Apparently eBay used its position as a major minority  shareholder to glean as much information as possible and then used that knowledge to launch Kijiji. If true, its enough to burn somebody inside. It is a high-stake game with Kijiji reporting a growth of 104% last year. Here’s a nice piece about Kijiji’s take on how it hopes to better Craiglist.

Things will get interesting if customers decide to take sides; the internet will soon see some crisp punches thrown on behalf of both parties. eBay has the advantage of filing the case first and taking the offensive whereas Craiglist has the advantage of being the underdog.