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?