Is craigslist a Monopoly?

3taps, a company that developed a platform on which apps can utilize information from classified ad sites, responded to a suit filed by craigslist with a counter-suit claiming that the online classifieds giant is a monopoly in violation of anti-trust laws.

This countersuit stems from an ongoing dispute between 3taps and craigslist over an app called PadMapper, which allowed users to browse through available apartments and homes in map form. Much of the information came from publicly available data found on craigslist, though the classified giant feels that this use of that data violates its terms and conditions.

The bigger question in my mind is whether or not craigslist really constitutes a monopoly. Are there really no contenders in the classifieds market? What does craigslist do that no other site does?

Is craigslist a bully?

The argument made by 3taps is that craigslist intentionally holds other developers back from creating any service or application that makes use of what craigslist makes available through its own site and apps. This much may be true, but isn’t it in craigslist’s best interest to keep traffic flowing through its own sites rather than through third-party apps that do little more than casually mention that the info came from craigslist? I think that would be a total waste of resources on craigslist’s part to provide data or third-party apps from which it doesn’t derive any direct benefit.

In that sense, yes. craigslist is totally keeping third-party developers down. Then again, would I want someone leeching off of my Internet connection and giving me little to nothing in return? I think not.

Is it a monopoly?

In order to be classified as a monopoly, you have to meet certain criteria.

The Free Dictionary defines a monopoly as:

An economic advantage held by one or more persons or companies deriving from the exclusive power to carry on a particular business or trade or to manufacture and sell a particular item, thereby suppressing competition and allowing such persons or companies to raise the price of a product or service substantially above the price that would be established by a free market.

US Legal defines a monopoly as:

Monopoly is a control or advantage obtained by one entity over the commercial market in a specific area. Monopolization is an offense under federal anti trust law. The two elements of monopolization are (1) the power to fix prices and exclude competitors within the relevant market. (2) the willful acquisition or maintenance of that power as distinguished from growth or development as a consequence of a superior product, business acumen or historical accident.

Under these two definitions, it could be argued that craigslist does indeed have a monopoly on online classified ads. It is a dominating force in the market, and it does set a price for some of its services. Legally, it makes sense that a company would make such a claim in court as it’s hard to argue that craigslist has prospered where some of its competition has not.

The claim made by 3taps described craigslist as a dominating force in the market.

It has become a de facto common carrier for US online marketplace exchange postings, giving craigslist an ability to command and dictate terms and conditions in consumer classified markets, control and obstruct innovation in those markets, and engage in anticompetitive behaviors consistent with monopoly power.

One important thing to note here is that there are plenty of alternatives available to craigslist. You could post and apply for jobs through LinkedIn or Monster, sell your things on eBay, post or find an apartment for rent on Place of Mine or HotPads, or find love on any number of sites dedicated to matchmaking. eBay even has a specialized classified ads service on its website.

So, whether you believe craigslist to be a monopoly or not, the countersuit being filed by 3taps may well have an impact on how sites control the use of their publicly-available data by third-party developers. In my mind, that’s far more significant than the initial cause of the claim itself.

What do you think? Is craigslist a monopoly?

Article Written by

Ryan Matthew Pierson has worked as a broadcaster, writer, and producer for media outlets ranging from local radio stations to internationally syndicated programs. His experience includes every aspect of media production. He has over a decade of experience in terrestrial radio, Internet multimedia, and commercial video production.

  • http://twitter.com/mfcompany Matthew Ferrara & Co

    Ok – here’s what wrong with this article: It uses “dictionary” definitions which are totally inadequate to understanding an economic/legal issue. Monopolies must be “granted” monopolistic status by a government/legal entity. As long as people have any choice *not* to buy their product and that other competitors are allowed into the market segment, claims of “market power” monopoly are sophistry. For example, when you could *only* buy electricity from one vendor to your house, there was a monopoly. With deregulated power, you can buy electricity from multiple producers. Thus, choice negates monopoly. Just because someone “corners” the market doesn’t make them a monopoly, as long as it’s legally done – through attracting the most consumers and their money/loyalty. However, competitors (especially losing ones) like to use the totally ancient and nebulous language of the anti-trust laws to destroy their competitors, ironically, through the *government monopoly* on the power of legal force.

    • https://plus.google.com/112301869379652563135/posts Ryan Matthew Pierson

      I tried to go with two different dictionaries on this one. One of them being a legal dictionary as opposed to a literary one. The problem here is monopoly rules are different depending on your country, as well. Microsoft is considered a monopoly in some countries while others see it as just another competitor in the software market. I did my best with the information I had. I tried to look at the issue from the perspective of a user, not an attorney (or a jury). The standard definition of monopoly would apply in that case, as the question is whether or not Craigslist is monopolizing on the online classifieds industry.

  • Stray

    How can CL be a monopoly? You don’t have to use it? And are they a bully? If I created a product it would be for others to use and hopefully I make a buck or two off it. I didn’t create it so that someone else can produce a side-app and make their own bucks off it. Come up with your own idea and make your own CL from it. I am really dismayed by younger people now who feel that they should be able to do anything they want and you’re a big meanie if you don’t let them? If I spend $10 million to design, engineer, produce and market a product, I’ll be damned if you’re going to come along, add a blue button to it and now claim that it’s yours. Guess again.