August 8, 2017
Rudy Verner and Rylee Johnston
LinkedIn, the most widely used social network website for professionals, is facing a pending lawsuit filed by hiQ Labs, a San Francisco startup that mines LinkedIn data to build an algorithm to predict whether employees will soon quit their jobs (“hiQ”).
hiQ filed the lawsuit in a California federal court asking the judge to declare that its practices comply with antihacking laws, including the 1986 Computer Fraud and Abuse Act which prohibits unauthorized access to computer systems and often carries both criminal and civil penalties. This filing came after LinkedIn’s counsel wrote to hiQ in May 2017 and demanded it stop accessing the site, despite hiQ’s ongoing practice of collecting and utilizing LinkedIn’s data since 2012.
LinkedIn argues that hiQ’s activity constitutes hacking and data theft under the 1986 statute. In contrast, hiQ argues that it is lawfully using publicly available information and that LinkedIn’s attempt to restrict the company from accessing public information is an unlawful attempt to stifle competition.
Websites like LinkedIn store and analyze user data and serve as a gold mine for companies that build human resource software. As reported in the Wall Street Journal, “the online activities of billions are mined to estimate inflation, glean consumer insights, forecast stock movements, value real estate or, as in hiQ’s case, predict employee behavior.” Virtually every industry is experiencing the impacts of data mining techniques. Companies and research organizations sometimes get explicit approval to harvest data from a website to understand consumer trends, but much of the data scraping industry operates in a legal gray zone by only utilizing information from user-created pages that are publicly available.
A hearing in this case is set for August 31, 2017 to determine whether LinkedIn should be prevented from limiting hiQ’s access to its site.
The dispute has deeper implications for the rapidly growing data analytics industry. It serves as a test of whether courts will permit companies to collect publicly viewable information posted by internet users. Whether businesses that scrape public information can be held liable under the law is a hotly debated legal question and depending on how the California court rules, this case has the potential to shut down smaller technology companies that rely on user-initiated websites for data analytics and software development.