September 12, 2019

Ninth Circuit upholds preliminary injunction barring LinkedIn from blocking access to public data

On September 9, 2019 the United States Court of Appeals for the Ninth Circuit upheld a preliminary injunction obtained by data analytics company hiQ Labs, Inc., preventing LinkedIn from blocking hiQ’s access of publicly available LinkedIn member profiles.  

hiQ uses bots to scrape data from public user profiles on LinkedIn, which it then analyzes and sells to business clients to (1) identify employees who may be at risk of being recruited away and (2) identify gaps in a company’s employees’ collective areas of expertise.    hiQ’s bots collect information from public LinkedIn profiles, and do not collect information from profiles that users have restricted access to using LinkedIn’s privacy settings.  In May 2017, LinkedIn sent hiQ a cease-and-desist letter, claiming that hiQ’s future use of publicly available LinkedIn user data would violate the Consumer Fraud and Abuse Act (CFAA), the Digital Millennium Copyright Act, California Penal Code § 502(c), and the California common law of trespass.  In response, hiQ sought a preliminary injunction preventing LinkedIn from blocking hiQ’s access to the publicly available data and seeking a declaratory judgment that LinkedIn could not bar such action in the future based on tortious interference and unfair competition claims.  The district court granted hiQ’s preliminary injunction.  

The Court found that the district court had not abused its discretion in concluding that the equities weighed heavily in favor of hiQ, whose business risked “extinction” absent the preliminary injunction.  The Court weighed the threat to hiQ’s business against LinkedIn’s assertions that hiQ’s activity threatens its members’ privacy — for example, many members who have public profiles, nevertheless choose to exercise a “Do No Broadcast” option when making changes to their profile — and therefor puts LinkedIn’s goodwill with its members at risk.  While the Court stated that LinkedIn’s privacy concerns had some merit, it discounted them because, among other reasons, there was little evidence to show that LinkedIn users with public profiles maintain an expectation of privacy with respect to their publicly posted information and LinkedIn’s own programs use member data in much the same way that hiQ was using member data.   Ultimately, the Court agreed with the district court’s conclusion that LinkedIn’s interest in preventing hiQ from scraping data did not outweigh hiQ’s interest in continuing its business.  Having determined that the balance of hardships tipped decidedly in favor of hiQ, the Court further concluded that hiQ raised serious factual and legal questions to be considered during the merits stage.  Namely:

  • whether the CFAA’s restriction on access “without authorization” (which LinkedIn sought to invoke in its cease-and-desist letter) applies where access is generally open to the public;
  • whether LinkedIn’s blocking of hiQ’s access to the data on which hiQ’s business relies constitutes tortious interference with hiQ’s client contracts, and 
  • whether selectively banning a potential competitor from accessing and using otherwise public data constitutes unfair competition under California law.  

The Court thus affirmed the district court’s imposition of a preliminary injunction, and remanded for further proceedings.