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Craigslist Faces Counterclaim for Monopoly

(CN) - A company that faces copyright claims over its use of Craigslist content now says that the online classifieds giant monopolizes the industry.

3Taps, which describes itself as a "leading platform for developers building applications using online ads," received a cease-and-desist letter in June from Craigslist, claiming that it has been misusing Craigslist's "protected content" in violation of copyright laws. PadMapper, an apartment rental listings mapper, received a similar letter.

When the companies continued accessing Craigslist content, the free classified listing site filed suit on July 20.

In its federal complaint in San Francisco, Craigslist said that it "has worked hard and invested heavily for many years so that its users can use its local community sites largely free of charge, and free from third-party advertising and marketing."

It accused 3Taps, along with PadMapper, of working to "misappropriate wholesale and commercially exploit" Craigslist content.

Craigslist says it is "the world's largest online forum for free local classified advertising and community discussions," receiving more than 60 million online visitors every month who post "several hundred million" classified ads each year.

3Taps replied last week that there isn't anything original or innovative about what Craigslist is doing, and that it shouldn't be allowed to monopolize information.

"3Taps admits that Craigslist provides what is commonly known as 'classified' advertising, but denies the insinuation that this form of advertising is in any way 'unique' to Craigslist, the derivative insinuation that 'classified' advertising is a concept originated by Craigslist, and the related insinuation that Craigslist is entitled in any way to protect as original any component of its site that can be characterized as a successor to an advertising methodology - the 'classified' ad - whose words, phrasings and categorical design have been in use since at least the 18th century," the counterclaim states.

The company also hammered Craigslist for calling itself a free service.

"3Taps further denies the insinuation that Craigslist operates itself as a free public service, since Craigslist is a for-profit enterprise whose value as a going concern is estimated by a principal stockholder as worth 'several billion dollars,'" according to the counterclaim authored by 3Taps attorney Allen Ruby. "To the extent there is anything genuinely 'unique' about Craigslist's free ads, it is because they are the works of users who place their own ads, write their own copy and own or control the goods or services that they - not Craigslist - advertise. 3Taps denies that these works of others can be asserted by Craigslist as its own."

Craigslist is maintaining a monopolistic power in various markets and denies that it has done so "on the merits," generating $100 million to $300 million in yearly revenue without "sinking any significant costs into research and development or innovations," added Ruby, an attorney with Skadden Arps Slate Meagher & Flom.

Greg Kidd, founder and CEO of 3Taps, applauded Craigslist for what it has accomplished, but said it shouldn't be using its market power to "stifle innovation and hurt consumers."

He described Craigslist's lawsuit as "baseless" and a "sham."

"The basis of our antitrust counterclaim and defense against Craigslist's baseless lawsuit is simple: public facts are public property - openly and equally available to all businesses and consumers," Kidd said in a statement. "Sham copyright claims and unenforceable terms of use cannot stand when they deceive users, intimidate innovators, or thwart a competitive marketplace."

3Taps simply providing the innovation that the public demands, but has not received, he added.

"In bringing our antitrust counterclaim, we hope to stop Craigslist from engaging in an illegal scheme to shut down third-party services and products that enhance the use of postings made on Craigslist and provide innovative and more useful ways to effect the exchanges the public seeks," Kidd said.

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