eBay is suing Craigslist over actions that eBay claims has diluted its investment in the online classifieds company.
eBay owns 28 per cent of San Francisco-based Craigslist and says in a statement that founder Craig Newmark and chief executive officer Jim Buckmaster took actions in January that "unfairly diluted eBay's economic interest in Craigslist by more than 10 per cent."
The company didn't provide further details and said it filed the suit under seal in Delaware Chancery Court to protect confidentiality agreements.
eBay, based in San Jose, California, has started its own classifieds site, Kijiji.com, which it believes can outgrow Craigslist by screening out illegal goods and services and emphasizing security and fraud protection.
Kijiji has about 1.7 million users compared with the 22.2 million that use Craigslist, according to a report from Classified Intelligence LLC in Altamonte Springs, Florida.
"We are surprised and disappointed by eBay's unfounded allegations, which came to us out of the blue, without any attempt to engage in a dialogue with us,'' Craigslist said in a blog posting.
Craigslist, which was founded in 1995, hosts ads for apartments, jobs and dates in six languages and covers hundreds of cities.
Agencies