craigslist blog

Trial starts in Delaware today, with eBay claiming craigslist’s directors acted inappropriately in implementing governance measures designed to protect the long term mission and values of craigslist.

The public version of craigslist’s pre-trial brief (PDF) is available, and Alexandria Sage has written a pre-trial “curtain raiser” for Reuters.

Separately, craigslist has filed suit in California charging eBay with unlawful and unfair competition, misappropriation of proprietary information, business interference, false advertising, phishing attacks, and breaches of fiduciary duty. This suit will proceed after the Delaware trial, but will probably not be presented to the jury until late 2011.

Delaware testimony will encompass eBay’s 2004 purchase of craigslist stock from a former shareholder.  craigslist is a private company that does not publish its financial information, and eBay and craigslist both agreed that the terms of this transaction should not be made public. However, these details will now likely be subject of testimony at trial.

As a condition for its 2004 stock purchase from a former shareholder, eBay insisted on acquiring special rights over Craig’s and Jim’s shares (e.g. rights-of-first-refusal over any sale of their shares), and special rights from craigslist (e.g. veto rights over mergers and acquisitions), for which it collectively paid $16 million. This sum was distributed to craigslist’s shareholders, in part because had it not been distributed, eBay would have had a pro rata claim on any portion retained by the company, effectively paying itself for the rights it purchased.  eBay’s special rights terminated in 2007, when it launched Kijiji in the US.

Also subject to testimony will be eBay’s misconduct, and abuses by eBay of its position as a shareholder of craigslist - evidence of and suspicions regarding which informed the craigslist board when the corporate governance protections in question were researched, deliberated upon, and ultimately adopted.

For additional information, please refer to craigslist’s pre-trial brief.

US District Court Judge John F. Grady has summarily dismissed Sheriff Dart’s suit against craigslist, concluding:

Sheriff Dart may continue to use craigslist’s website to identify and pursue individuals who post allegedly unlawful content. But he cannot sue craigslist for their conduct

Here is the full text of the judge’s ruling

Matt Zimmerman at the EFF has excellent analysis and commentary:

Meritless cases brought by law enforcement officers, amounting to little more than publicity stunts with little to no chance of success, do little to address the officers’ underlying concerns.

Our trial before the Delaware Chancery Court has just been postponed at eBay’s request, but it’s worth noting that the Chancellor has now granted summary judgement dismissing 2 of eBay’s claims.

As to the remaining claims, the evidence at trial will show craigslist and its directors adopted reasonable governance measures to protect craigslist and its mission from, among other things, eBay’s exploitation of its position as stockholder to harm craigslist and obtain unfair commercial advantage.

Here is the public version of craigslist’s trial brief.

The unrelated suit against eBay in California — for 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 — is unaffected.

Noteable as this news cycle winds down ( “Craigslist Pwns McMaster,” “Pandering Has Its Price,” “Craigslist 1, McMaster 0,” “McMaster’s Final Humiliation” ) has been the absolute disinterest shown by politicians and journalists in hardcore sex-for-money ads featured in journalistic media, no matter how numerous or graphic they may be.

Here are a few out of tens of thousands of “escort ads” featured on backpage.com adult classifieds owned by Village Voice Media, publisher of a chain of weekly newspapers. (WARNING - EXPLICIT SEXUAL CONTENT):

• I am a nasty freaky girl who loves sucking cock (Chicago)
• An Irish blowjob and a cum showering rainbow (New York)
• Cum lay your hotdog on my bun for memorial day (Dallas)
• Doing men 18 to 65 with trucker parking (Toledo)
• Three holes anything goes $90 - GREEK included (New Jersey)
• Can u fuck my tight pussy hard ask for alexis - age 18 (Atlanta)
• Thick meaty transexual treat (Philadelphia)
• I luv 2 suk n fuk - age 18 (Phoenix)
• Deep throating full service freak (Orlando)
• I gotta big a$$ fat pu$$y big boobs need I say more (St Louis)
• Enjoy multiple orgasms with “Flavor” (Myrtle Beach, SC)
• Let me put you to bed backdoor available $80 (Columbia, SC)
• Ebony slut will blow u away wet n ready 4 u gfe (Greenville, SC)

UPDATE - Now deleted ads included photos of sex acts, and price quotes for: “GFE, BBBJ, CIM, greek, swallow, DATY, 69, facials, golden showers, anal”

UPDATE - Screenshot of ad cited above (CAUTION, EXPLICIT SEXUALITY)

These examples were “featured” ads for which Village Voice charged extra, such that this content presumably fell well within their guidelines.

It’s worth noting that these ads’ TITLES ALONE contain more explicit content than you will find in all craigslist adult service ads combined.

Could the blessing of politicos on voluminous pornographic sex-for-money ads in journalistic media have anything to do with the need for positive coverage and campaign endorsements from said media?

As for journalists, is it possible that criticizing craigslist is more career-friendly than taking their own employers (or publishing peers) to task?

AP reporter Meg Kinnard has revealed that Defendant McMaster has not prosecuted so much as a single prostitution case in his 7 years as SC Attorney General, and has not objected to local newspapers running adult service ads, choosing instead to attack SF-based craigslist:

Ann Bartow, a professor of Internet law at the University of South Carolina School of Law, said McMaster’s decision to take on Craigslist and not local newspapers that advertise escort services suggests political motivations.

“Why Craigslist? Newspapers run the same ads, but they have people locally who would stand up for them, and he didn’t want to alienate the newspapers that would be reporting on his campaign,” Bartow said.

craigslist has filed suit against SC AG Henry McMaster in federal court in South Carolina, seeking declaratory relief and a restraining order with respect to criminal charges he has repeatedly threatened against craigslist and its executives.

Two weeks ago Mr McMaster presented craigslist with an ultimatum, “to remove the portions of the Internet site dedicated to South Carolina and its municipal regions which contain categories for and functions allowing for the solicitation of prostitution and the dissemination and posting of graphic pornographic material” within ten (10) days.”

“If those South Carolina portions of the site are not removed,” McMaster said, “the management of craigslist may be subject to criminal investigation and prosecution.”

In addition to being unwarranted by the facts, legal experts agree that the charges threatened represent an unconstitutional prior restraint on free speech, and are clearly barred by federal law (sec 230 CDA).

Interestingly, if you read Mr McMaster’s ultimatum carefully, you’ll note that the only way to definitively comply with it is to take down the craigslist sites for South Carolina in their entirety. The open architecture of craigslist, quintessential to the value it provides for users, simply does not allow for the absolute prevention of solicitation or pornography, with respect to any of its categories and functions.

Usage of craigslist in South Carolina has exploded over the last two years, with some cities experiencing 2000% growth. South Carolinians clearly value craigslist services, and appreciate finding jobs, housing, automobiles, for sale items, friends, romance, community information, local services, event listings, and just about everything else they need in their everyday lives, all in one place, and all for free.

Mr McMaster has persisted with his threats despite the fact that craigslist:

• is operating in full compliance with all applicable laws
• has earned a reputation for being unusually responsive to requests from law enforcement
• has eliminated its “erotic services” category for all US cities
• has adopted screening measures far stricter than those Mr McMaster himself personally endorsed with his signature just 6 months ago
• has far fewer and far tamer adult service ads than many mainstream print and online venues operating in South  Carolina
• has made its representatives available to hear Mr McMaster’s concerns in person
• has politely asked Mr McMaster to retract and apologize for his unreasonable threats
  

In case there had been any ambiguity as to his intentions, Mr McMaster made the following remarks on Sunday:

“We opened an investigation at 5:01 on Friday, as promised. . . .  We are preparing for a prosecution.  We are investigating.  We are moving forward. . . . . The #1 defendant is Mr. Jim Buckmaster, who is the man in charge of craigslist.. . . .  craigslist is a big promoter and facilitator of prostitution.”

Mr McMaster’s repeated threats of criminal prosecution should we refuse to shut down craigslist for South Carolina have left us little choice but to seek declaratory relief before the court.

Dear South Carolina Attorney General Henry McMaster,

Two days ago you accused craigslist, and me personally, of engaging in criminal acts, reiterating your previous threat to file unwarranted and unconstitutional charges against us that are clearly barred by federal law. As you put it, “We have no alternative but to move forward with criminal investigation and potential prosecution.”

These very serious allegations followed the dramatic changes we implemented last week, widely applauded by other Attorneys General, that go far beyond the policies and procedures you yourself personally endorsed just 6 months ago, as indicated by your signature on the Joint Statement.

So effective in fact, that our “adult services” and soon-to-be-retired “erotic services” sections combined, for all cities in South Carolina, currently feature a total of 40 ads, all of which comply with our terms of use. That’s 40 ads out of a total of 334,180 currently listed on our SC sites. The rest comprise a thriving marketplace for South Carolinians, offering jobs, housing, for sale items, local services, and just about everything else.

Many prominent companies, including AT&T, Microsoft, and Village Voice Media, not to mention major newspapers and other upstanding South Carolina businesses feature more “adult services” ads than does craigslist, some of a very graphic nature. For a small sampling, look (careful NSFW) here, and here, and here, and here, and here, and here, and here, and here, and here, and here, and here.

Have you fully considered the implications of your accusations against craigslist? What’s a crime for craigslist is clearly a crime for any company. Are you really prepared to condemn the executives of each of the mainstream companies linked above, and all the others that feature such ads, as criminals? craigslist may not matter in your world view, despite our popularity among your constituents, but mightn’t you want an endorsement from any of the SC newspapers for your gubenatorial campaign, whose publishers you’ve just labeled as criminals? Do you really intend to launch a criminal investigation against the phone company? What about potential new jobs connected to big data center buildouts in SC by Internet companies? Are you *sure* you want to prosecute all of their CEOs as criminals???

If you are threatening our founder Craig Newmark, a board member with no operational role at craigslist other than as a customer service representative, then you are expanding your list of “criminal suspects” to include thousands of employees at the above-named companies, or the companies’ boards of directors, or both.

Mr McMaster, I strongly recommend you reconsider and retract your remarks, and positively affirm that you have no intention of launching criminal investigations aimed at any of these upstanding companies, because in truth none of them are deserving of such treatment. Certainly when it comes to craigslist, by any objective standard your threats and accusations are unreasonable and unfair:

• threats of criminal prosecution are utterly unwarranted by the facts
• the charges threatened are unconstitutional and barred by federal law
• our adult ad screening regimen is stricter than the one you endorsed
• our adult services ads are fewer and tamer than other SC venues

We’re willing to accept our share of criticism, but wrongfully accusing  craigslist of criminal misconduct is simply beyond the pale. We would very much appreciate an apology at your very earliest convenience. As I’m sure would all of the other fine companies whose executives you’ve called out as criminals.

Sincerely Yours,

Jim Buckmaster
CEO, craigslist

South Carolina Attorney General Henry McMaster today announced that our recent improvements, which go far beyond measures he himself personally endorsed with his own signature six months ago, not only aren’t good enough, but actually require a criminal investigation:

“As of 5:00 p.m. this afternoon, the craigslist South Carolina site continues to display advertisements for prostitution and graphic pornographic material. This content was not removed as we requested. We have no alternative but to move forward with criminal investigation and potential prosecution.”

He evidently feels justified in singling out craigslist for investigation, and publicly condemning me personally as being worthy of criminal prosecution.

Seriously? The craigslist adult services section for Greenville, SC has a total of 1 ad for the last 3 days, featuring a photograph of a fully clothed person. The “erotic services” section for Greenville, which we recently closed, has 8 ads total which will expire in two days, and even for these ads the images and text are quite tame.

Meanwhile, the “adult entertainment” section of greenville.backpage.com (careful with link, NSFW), owned by Village Voice Media, has over 60 ads for the last 3 days, and about 250 in total. In sharp contrast with craigslist, many of these ads are quite explicit, quoting prices for specific sex acts, featuring close-ups of bare genitalia, etc.

Of course, no one in mainstream legal circles thinks either company should be subject to civil suit, let alone a criminal investigation. But if for whatever reason you were so motivated, would you target a venue with 9 PG-13 rated ads, or one with 250 XXX rated ones?

And FWIW, telephone yellow pages and other local print media have both companies beat hands down as adult service ad venues for South Carolina.

Any interest in targeting them for criminal prosecution? Didn’t think so.

Update - 1st comment on this entry lists 19 adult ads for 1 day from the Charleston Post and Courier.

Update 2 - 5 pages of escort listings on live.com (owned and operated by Microsoft), click on the “images” tab at the top of the listing page if you want to see photographs (careful NSFW), and note the sponsored “hotel” ads being sold against these listings

Update 3 - 26 escort ads for Myrtle Beach on yellowpages.com (owned and operated by AT&T). Anyone care to count the escort ads in the print yellow pages for major cities in South Carolina?

As of today for all US craigslist sites, postings to the “erotic services” category will no longer be accepted, and in 7 days the category will be removed.

Also effective today for all US sites, a new category entitled “adult services” will be opened for postings by legal adult service providers. Each posting to this new category will be manually reviewed before appearing on the site, to ensure compliance with craigslist posting guidelines and terms of use. New postings will cost $10, but once approved, will be eligible for reposting at $5.

Unsurprisingly, but completely contrary to some of the sensationalistic journalism we’ve seen these past few weeks, the record is clear that use of craigslist classifieds is associated with far lower rates of violent crime than print classifieds, let alone rates of violent crime pertaining to American society as a whole.

The relative safety of craigslist compared to print classifieds is likely due to some combination of:

• Measures such as blocking, screening, and telephone verification
• Community moderation via our flagging system
• Electronic trail ensures violent criminals are quickly caught
• Personal safety tips prominently posted
• Unusually high level of cooperation with law enforcement

Community moderation as exemplified by our flagging system is arguably the most successful system ever conceived for eliminating inappropriate activity from a massive internet community. Working in tandem with various other protective technologies, it is an inescapable force to be reckoned with for anyone set on abusing free internet communications across a broad array of posting types.

However, with respect to this new paid category for advertising by legal businesses, we will experiment with some of the methods traditionally employed in paid print classifieds.

We’d like to thank everyone who has provided helpful input over the past few weeks, all of which was closely considered:

• Our users, whose suggestions shape every aspect of craigslist
• Attorneys General, who provided valuable constructive criticism
• Law Enforcement officers nationwide, hugely supportive as always
• Legally compliant businesses wishing to advertise their services
• EFF and other experts defending free speech and Internet law

We are optimistic that the new balance struck today will be an acceptable compromise from the perspective of these constituencies, and for the diverse US communities that value and rely upon craigslist.

Note: Our announced intention to contribute 100% of net revenues for the “erotic services” category to charity has been fulfilled, and will continue to be fulfilled, notwithstanding criticism questioning our good faith in this regard. However, in light of today’s changes, and to avoid any future misunderstanding, we are making no representation regarding how revenue from the “adult services” category will be used. Our commitment to philanthropy remains, and craigslist will continue to develop its charitable initiatives.

Interesting Wikipedia entry, Lonely Heart Killers, lists high-profile cases of killers using print classified ads.

Now, it’s horrible to think of craigslist being used in connection with any violent crime whatsoever, let alone a murder. One crime is too many, and we must do everything in our power to eliminate it.

However, when critics rush to tar craigslist as especially dangerous, it’s important to put things in perspective. craigslist users have posted more than 1.15 BILLION classified ads to date, easily 1000x the combined total ever posted to the print publications involved in all of these “print ad murders”.

Anyone demanding that craigslist use the same protections that print classifieds have employed should be careful what they’re wishing for — because the incidence of violent crime in connection with print classifieds is clearly far, far higher than it is for craigslist.