


Since then, Kelley estimates he has spent $11,000 in attorney's and court fees fighting his online business adversaries.

"You'd think (Craigslist) would want to get rid of the tweakers and keep good-quality, licensed business people who are productive members of society," he said.

Like other small businesses worldwide using the free classified Web site, Kelley stumbled last year onto a little-known dark side of Craigslist.

Some critics say it's a situation where anything goes, including slanderous attacks and competitors ejecting each other's ads in a process called "flagging."

Using conventional software to circumvent Craigslist rules, some individuals have figured out how to quash competition by removing ads of their rivals, whether they're house-cleaning services or real estate sellers.

Craigslist employs an automatic tool that yanks offensive or false ads if enough different users flag them. The problem: Single users can cheat the system with software that makes the flagging appear to be from multiple users.


It's a different form of Internet advertising sabotage, similar to "click fraud" where individuals repeatedly click on a rival's paid Web advertisement on Google or other search engines, to run up their rivals' costs.

They're also slamming each other with accusations of false advertising, bad business practices and even criminal activities.

"They're cybertrashing each other, whether bumping each other's ads off or defaming each other's products," said Parry Aftab, executive director of WiredSafety, a volunteer network dedicated to Internet security issues.

She said it's much more likely to occur on a more freewheeling site such as Craigslist.

"They can't do that if they're trying to buy an ad in your paper. They can't do it on eBay because . . . you'll get in a lot of trouble with eBay. There is less moderating and less oversight of what users are doing on Craigslist."

In an e-mail, Craigslist Chief Executive Jim Buckmaster said, "We are continually updating our systems to combat 'black hat' software of every kind."

He also said "remedial measures, including account suspension, are routinely taken against those violating site guidelines."

That's of little comfort to Kelley and other small-business owners who rely on the free advertising offered by Craigslist. They say they've spent scores of hours fighting the flagging practice.

Last May, after tracing the person he believed was killing his ads, Kelley filed a lawsuit in Sacramento County Superior Court against James D. Smith, owner of Mother Nature's Clean Green house-cleaning service.

Smith could not be reached for comment.

Kelley said he filed the lawsuit after Craigslist officials would not respond to his repeated complaints about unfair flagging. He sued for libel, defamation and unfair competition charges, his attorney said.

"We subpoenaed Craigslist last October," said David Barrett, Kelley's Sacramento attorney. "We gave them specific ads that were flagged and this guy's posts and wanted his IP (Internet address) information. We wanted to make the connection. . . . They never responded."

A Craigslist official said in an e-mail the company can't comment on a pending lawsuit.

When Smith failed to appear, Kelley won a default. A trial is set for June, but he is unsure whether he'll pursue the case.