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Craigslist has filed suit against eBay in San Francisco County Superior Court, alleging trademark infringement, breach of fiduciary duty, anti-competitve trade practices and deceptive advertising. Why California? Because the state has some of the strictest antitrust and competition trade laws in the country. Craigslist is asking the court to award damages and force eBay to divest from the online classifieds site. Also alleged? That eBay was a big meanie. The best parts:

When eBay's then-CEO Meg Whitman was wooing Craigslist founder Craig Newmark and CEO Jim Buckmaster, she was so nice! She even promised that they'd get lots of playdates on the board with dreamy eBay founder Pierre Omidyar, and Newmark and Buckmaster believed her when she said Omidyar held the same Sunday-school values they did:

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 than an honest, opn 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.

Newmark even put up a blog post about how much fun it was going to be to work with eBay, but eBay didn't link back to his blog — I know, how mean is that!

At the time, eBay did not disagree with Craig's impression, but instead enthusiastically embraced it. For example, when Mr. Price [Ed. Note: Garrett Price, VP of new ventures] of eBay (who witnessed virtually all of the negotiations involving the transaction) was provided a late draft of Craig's blog entry, his response was "[I] Love it." However, eBay did not post a link to Craig's blog entry on its own website once the transaction had closed, as eBay had promised it would.

And that was only the start of eBay's bullying behavior. Included in the complaint is a screenshot of text ads on Google that Craigslist offered as evidence of eBay's trademark infringement, false advertising and anti-competitive practices.

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Of course, none of this will be settled any time soon — a case management conference isn't scheduled until October 10. And based on how nasty this is getting, I doubt a settlement — at least one not involving lollipops — will be reached anytime soon.(Photo by AP/Jeff Chiu)