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Competitors Sue Craigslist for Discrimination

Craigslist, an online classified ad Web site that doesn't charge to place or post ads, defied conventional wisdom that advertising needs to cost money. But now, per this here post by Craig Williams of  May It Please the Court, looks like Craigslist is breaking new ground for another reason: it's been sued for violations of housing discrimination laws, not by victims of discrimination or special-interest groups but by its "for fee" competitors:  newspapers. 

Williams' post explains that newspapers are required to comply with U.S. Department of Housing and Urban Development requirements on nondiscriminatory housing ads, whereas Craigslist does not. Forcing Craigslist to monitor ads to ensure compliance with housing law and other nondiscrimination laws would increase costs for Craigslist and, perhaps, force it to charge for postig ads. Williams points out that Craigslist should not be treated the same as newspapers because "ads on CraigsList are free and posted by individuals. Ads in newspapers cost, and they are posted by newspaper staff." But ultimately, Judge Amy St. Eve in Chicago will decide if that distinction will save Craigslist. In addition, Craigslist has friends in high places, like Google, AOL and eBay, which filed an amicus curiae brief, arguing that Craigslist is protected from liability for HUD violations in the same way the phone companies and Internet providers are protected from liability for violations of the law occurring over their wires. 

Williams comments:

It didn't help that CraigsList has taken a lot of housing ads away from newspapers, which may be the real genesis for the lawsuit. Especially when the ads are free.  That's a lot of lost revenue, and the HUD claim is a creative attempt to stopgap that lost revenue stream.

I'd be interested in knowing, as a practical matter, how many of Craigslist's ads actually violate housing discrimination laws. Do newspapers have standing to bring these claims at all? They may argue they're disadvantaged by compliance with discrimination laws, but they're not the parties that the laws were intended to protect. Seems that the court should at least wait until a truly injured party complains to rule on these issues.

Posted by Carolyn Elefant on June 29, 2006 at 06:59 PM | Permalink | Comments (1)


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