3TAPS, INC.'S ANSWER AND COUNTERCLAIM Case No. CV-12 ...

12345678910111213141516171819202122232425262728199. craigslist has engaged in an anticompetitive scheme, including filing serial shamlitigation and threatening such litigation, copyright misuse, imposing improper Terms of Use onusers, and ghosting and other misconduct, to acquire, enhance, and/or maintain this monopolypower in the Relevant Market for onboarding of classified ad content in violation of Section 2 ofthe Sherman Act.200. If for any reason, craigslist is deemed not to have monopoly power in the RelevantMarket or Submarkets for onboarding of classified ad content, there is a dangerous probability thatcraigslist will acquire such power.201. craigslist’s anticompetitive scheme has given it the power to control pricing andexclude competition in the Relevant Market.202. Upon information and belief, network effects impose high barriers to entry andexpansion for any potential new entrant into the Relevant Market. These barriers are evidenced bythe failures of major companies—such as eBay and Yahoo!—to enter and gain traction in theRelevant Market.203. craigslist’s willful and wrongful maintenance and/or extension of its monopolypower (or its attempt to monopolize) is not the result of growth and development as a result ofinnovation, business acumen, or by virtue of offering a superior product. Rather, it is a directconsequence of craigslist’s intentional, exclusionary conduct in connection with its anticompetitivescheme.behavior.204. There is no efficiency-enhancing, procompetitive justification for craigslist’s205. craigslist’s anticompetitive scheme alleged herein has injured (and unless enjoined,will continue to injure) consumers and competitors in the Relevant Market for onboarding throughdecreased output, reduced choice, reduced innovation, and other anticompetitive effects includingraising additional barriers to entry in the Relevant Market.206. By reason of craigslist’s unlawful monopolization and/or attempted monopolizationof the onboarding content market, 3taps—a competitor in the downstream market for indexingwhich serves as a bridge to the search market for onboarded classified ad content—has been3TAPS’ ANSWER AND COUNTERCLAIM66CASE NO.: 12-CV-3816-CRB