LinkedIn Lost In Court. What Does It Mean For Businesses?

Marta Balukiewicz in

Blog/Other posts/LinkedIn Lost In Court. What Does It Mean For Businesses?

The global networking site loses a legal battle, the California-based startup opens the floodgate for scraping data legally from LinkedIn, and third parties can’t wait to get the ball rolling – scanning for, processing and collecting data has seemingly never been so easy and allowed for. What does the August decision of the American court mean for sales and marketing experts?

This was a dagger to the heart of the Microsoft-owned LinkedIn. Back in mid-August, American federal court released a devastating judgment – LinkedIn has to allow hiQ Labs – a San Francisco-based startup dealing in data collection and analysis, to scrape information available in public user profiles.

This is a strong talking point for participants of the global, heated discussion on the data ownership online. In other words, scraping data still isn’t legal, nor illegal, so the debate hasn’t been settled. One important thing to consider though, at least in terms of California law and businesses operating within, is that the recent judicial decision can be interpreted as a green light for processing data obtained online.

A small startup won against a giant

The August decision of the court is the outcome of a complaint lodged earlier this year by HiQ. The startup has been scraping data from LinkedIn. In short, it’s been using its analytics tools to process LinkedIn data using a self-optimizing algorithm, which has been combing through the site in search of email addresses. Next, the startup has been selling these contacts to its clients.

HiQ was scraping data up until May, which was when LinkedIn demanded they stop the process and implement certain tech limitations – block automaton scrapers.

The Microsoft-owned social site released an official statement asking HiQ to terminate scraping because in their opinion the practice has been violating user privacy, as well as the provisions found in the “Computer Fraud And Abuse Act”. LinkedIn has equated hiQ’s operations to illegal third-party accessing their user details.

The startup fired back saying the networking site is illegally blocking access to widely available information. A judge agreed with the startup, stating that LinkedIn can’t prevent HiQ bots from collecting data and has dismissed the site’s objection.

Scraping – legal or illegal?

LinkedIn has nearly 500 million users worldwide, but only 175,000 of them have made their profiles public. Since the details have been willingly provided by the very users, the site was unable to prove in front of the judge that it’s the owner of the data to an extent, which would give it the right to prevent third-parties from accessing them.

In theory, anyone could manually click through the profiles, write down all the data on paper, and then enter them into a computer database. Of course, this is a scenario plausible only when someone has a lot of time and resources at their disposal.

scraping emails

In practice, bots can take care of it way faster and more efficiently. They automatically search for and sort data, and on top of that, they learn on their own how to do that at an increasingly more effective pace. The ruling states clear – algorithms can dig trough the data that’s widely available.

HiQ vs. LinkedIn – a global precedent

The HiQ Labs vs. LinkedIn Corp case is extremely important, because it may constitute a precedent for the online industry and the global economy, which is becoming increasingly reliant on data.

The case may prove to be a groundbreaking moment not only for businesses dealing in data collection, but also for tycoons such as Facebook, Google, or Microsoft. These are the companies collecting the most online user data, and so far it’s been them, who have set the rules for utilizing this information.

So far, LinkedIn was the sole owner. Marketers and salespeople could only reach the users via the site itself, paying hefty fees in the process. Now, this may be a thing of the past.

The option to search for and reach users excluding LinkedIn will most likely cause its leading market position to be undermined. Since a site as big as LinkedIn has no right no block the data users trusted it with, what about other major players like Facebook and Google? These companies have now a hard pill to swallow.

Email address doesn’t equal success

After hearing the news of the hiQ Labs’ win, many companies are probably already thinking about developing their own bots, and the market may see even more databases containing LinkedIn records.

Just as a reminder, the site has nearly 500 million users, a number of which set up their accounts using private addresses. Contacting them for B2B purposes isn’t something that’s going to work well for you.

linkedin from emails

Even if we assume that 1/3 are business emails, then this still doesn’t guarantee any level of success in utilizing them. If you wanted to run an email campaign on your own, you’d be facing multiple challenges, and believe me, obtaining the address is the least of them.

Don’t try this at home

A potentially wider availability of LinkedIn user data creates a unique danger. It may start to be put to use by individuals and business with little knowledge of efficient sales operations.

Prospects may get flooded with low-quality cold emails that will have the opposite result – they’ll discourage people from wanting to have anything to do with the particular brand, instead of eliciting a positive response.

This would’ve been a shot in the foot not only for companies trying to clumsily run these campaigns on their own, or using services of inexperienced contractors, but also a huge blow for professional businesses dealing in cold emailing.

A small business victorious against a tycoon

A small San Francisco startup – hiQ Labs – has fought a battle where the stakes were high. Obviously, there’s still a lot of unanswered questions and this surely isn’t the end of the legal clash between the two. LinkedIn has already announced an appeal, however, the ruling opens up the door for many smaller companies worldwide and ushers in a heated debate over the broadly understood data ownership online.

As stated in hiQ’s press release, online innovation shouldn’t be hampered, especially by anti-competition actions of a small circle of powerful businesses, which collect publicly available data. In their own words:

“This is an important victory – not only for us, but for every company that utilizes publicly available data in the services it provides.”

According to Mark Weidick, the CEO at hiQ Labs, LinkedIn tried to illegally eliminate the operations of smaller competitors such as hiQ in order to make money off the collected data in the future. LinkedIn’s databases are probably among the most valuable collections along those of Facebook and Google.

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Marta Balukiewicz

Former journalist. Loves to ride a motorcycle, writes about B2B marketing with a passion. Thanks to work in RightHello she knows the secrets of lead generation and cold email campaigns. Privately a big fan of Iron Man.