US prosecutors launch probe in eBay-Craigslist dispute

US prosecutors are reported to have launched a criminal probe into alleged misappropriation of confidential information by employees of eBay Inc from classified ad service Craigslist.

The report based on the subpoena by the grant jury said the two companies are involved in a dispute being fought in civil court over allegations that online giant eBay used its Craigslist board seat to gain access to confidential information about the classified ad business as eBay prepared to launch a rival service.

The subpoena seeks information pertaining to "incidents where eBay employees engaged in alleged criminal activities and misconduct focused around the misappropriation of proprietary/confidential information from Craigslist."

San Jose, California based eBay bought a 28 per cent stake in Craigslist in 2004 and developed an online classified site called Kijiji, in 2007, which it renamed eBayClassifieds.com.

According to eBay spokeswoman Amanda Miller, the company would co-operate in any inquiry related to the disputes with Craigslist.

"EBay believes that Craigslist's allegations against eBay are without merit," Miller said in an e-mail yesterday. "We will continue to vigorously defend ourselves, and we will aggressively pursue our claims against Craigslist."

Last year, a judge of Delaware Chancery Court ruled Craigslist was within rights to remove and eBay representative from its board, but he also ruled that Craigslist could not dilute eBay's 28.4 per cent stake in the company.