Craigslist officials were caught off guard when told in 2007 that their minority shareholder, eBay, was going to compete directly with them in the online classifieds business in the U.S., an attorney for Craigslist said Wednesday.

Ed Wes said he was equally troubled by eBay’s defiance in the face of Craigslist’s subsequent request that eBay divest or sell its 28 percent minority stake because Craigslist was no longer comfortable having the online auction giant as a shareholder.