Taking on LinkedIn and Microsoft, hiQ turns to crowdfunding for help with legal costs

It’s one of those David vs. Goliath battles:  LinkedIn’s 8,000 employees, a company that Microsoft bought in 2016 for $26,5 billion dollars, vs. hiQ Labs, which has 13 employees. So when they two tangle in court, you can understand how difficult financially it can be to go up against the big guys.

hiQ has turned to CrowdJustice, a crowdfunding site that tries to raise money for legal battles,  to help fund litigation costs.  In August, hiQ Labs won a preliminary injunction in federal court to prevent Microsoft-owned LinkedIn from threatening criminal prosecution if hiQ continued to view publicly available member profiles.

hiQ says it uses this information to provide analysis and insight to businesses that want to retain key employees and optimize talent. The company says it used only the information from profiles that LinkedIn members themselves have decided to display publicly.

“We’re looking to raise just $100,000 in this initial push to help fund our response to LinkedIn’s appeal. But we firmly believe the value of this effort goes far beyond the actual funding. So many have expressed belief in our cause that we wanted to offer a way for them to come together, to join the cause and to take action.” – Mark Weidick, CEO of hiQ Labs

It is hiQ’s contention that LinkedIn is trying to force a smaller competitor out of business by illegal violating free speech and competition laws. Earlier this month, LinkedIn introduced its own “Talent Insights” product at an HR conference in Nashville that bears a remarkable resemblance to hiQ Labs product offerings.

“We understand LinkedIn wants to get into our business, and that’s fine. But we believe LinkedIn is trying to illegally force us out so that they can have the business for themselves.” – Mark Weidick, CEO of hiQ Labs

The Background

It’s a battle over privacy rights that has constitutional law implications.  At the heart of it if a simple question with an incredibly complex answer:  If you share it on social networking websites, does it become public or can access by limited?

Right now, the case features two companies going to court:  LinkedIn and hiQ.  hiQ is a data mining firm on the West Coast that helps companies predict which of their employees might be looking for other jobs.  It does this, in part, by scraping information from public profiles on LinkedIn.

LinkedIn claimed the practice violated the Computer Fraud and Abuse Act that portrays unauthorized access into computer systems as a criminal offense in addition to violating its Terms of Service.

In the Cease and Desist letter sent by LinkedIn, it said its TOS prohibited:

  • Scrape or copy profiles and information of others through any means (including crawlers, browser plugins and add-ons, and any other technology or manual work)
  • Copy or use the information, content or data of others available on the Services (except as expressly authorized)
  • Rent, lease, loan, trade, sell/re-sell access to the Services or any related information or data;
  • Share or disclose information of others without their express consent; and
  • Use manual or automated software, devices, scripts robots, other means or processes to access, “scrape,” “crawl” or “spider” the Services or any related data or information.

hiQ responded by saying it has a legal right to access the data under the First Amendment.  It also claimed out that LinkedIn had been aware of the practices for several years without objection.

hiQ 1
hiQ complaint for Declaratory and Injunction Relief

The first round went to hiQ when District Court Judge Edward Chen ruled that the company can continue to scrape the data while the case makes its way through the legal system.  LinkedIn had asked for an injunction to stop the process, which was denied.

“U.S. District Judge Edward M. Chen equated LinkedIn to a store owner who hangs a sign in a window and then seeks to prevent certain people outside from seeing it.” – DJ Pangburn in Fast Company

At the heart of the issue is no less that who owns the data and what is public, and whether scraping data is protected under the First Amendment.

hiQ 2hiQ complaint for Declaratory and Injunction Relief 

The court also ruled that “hiQ has raised serious questions as to whether LinkedIn, in blocking hiQ’s access to public data, possibly as a means to limiting competition, violates state law.”

In its complaint, LinkedIn referenced a 2013 court ruling involving Craigslist and 3taps which reinforced the right for a computer owner to selectively revoke authorization to access a website.   Craigslist was victorious in its suit against 3taps.

Craigslist also took on a company that was scraping its real estate listings and using them for its own commercial purposes.  Craigslist won a $60 million-dollar judgment against RadPad, Inc.