SAN FRANCISCO (CN) — Israeli ad consulting firm BrandTotal violated Facebook’s terms of use when it harvested user data without permission, a federal magistrate judge found in the latest round of wrangling ahead of a trial set for late summer over BrandTotal’s data scraping practices.
BrandTotal helps corporate clients interact with their ads and those of their competitors on social media through one of its most popular products, a Google Chrome browser extension called UpVoice that automatically collected data on ads that its paid “panelists” saw on the site.
Following an investigation into UpVoice, Facebook revoked BrandTotal’s access to its platform on Sept. 30, 2020, and filed a lawsuit in October 2020 that claims BrandTotal’s practices violated federal and California anti-hacking laws as well as Facebook’s terms of use by failing to properly disclose that UpVoice was also collecting users’ personal information.
Google also removed UpVoice from its Play Store, which disabled most installed copies of the Chrome browser extension, after Facebook alerted Google that BrandTotal was “improperly scraping user PII (e.g., gender, relationship status, ad interests, etc.) without proper disclosure.”
BrandTotal then countersued Facebook, now known under its parent company Meta, for interfering with its business relationships with clients, app users, investors and Google.
BrandTotal has since released an updated version of its product called UpVoice 2021 that only collects data on ads while allowing panelists to self-report their demographic information, and Facebook has agreed not to take against the new version without advance notice to BrandTotal while the litigation runs its course.
The case has already seen multiple iterations, with U.S. Chief Magistrate Judge Joseph Spero dismissing BrandTotal’s counterclaims then denying Facebook’s motion to dismiss BrandTotal’s amended pleading.
On Tuesday, Spero delivered his latest ruling in the two-year legal battle, finding BrandTotal breached Facebook’s terms of use, specifically section 3.2.3 which reads, “You may not access or collect data from our Products using automated means (without our prior permission) or attempt to access data you do not have permission to access.”
“[There is both declaration testimony and corroborating evidence that Meta’s email to Google accurately reflected its beliefs at the time about BrandTotal engaging in deceptive data collection. Discovery has now closed, and BrandTotal identifies no evidence that Meta instead believed that BrandTotal provided proper disclosures, or that its message was otherwise knowingly or recklessly false,” Spero wrote in his 68-page ruling.
“At the time of the events at issue, BrandTotal was routinely violating Meta’s terms of service at least by engaging in automated data collection without permission.”
BrandTotal also failed to show that those terms are unenforceable, either by being unconscionable or burdening free speech and the flow of information, Spero found.
The judge also noted that BrandTotal never brought an antitrust claim against Facebook even though it has argued that Meta monopolizes the market for social media advertising and analytics.
“BrandTotal’s motion cites evidence that it competes with Facebook, and that its customers have sought BrandTotal’s services to better understand their own advertising campaigns despite Facebook offering them similar analysis, but cites no evidence beyond that regarding the nature of the market at issue or whether the sort of data collection barred by section 3.2.3 is necessary to competing in that market,” Spero wrote, adding, "Once again, BrandTotal has not identified any unusual circumstances of this case that would threaten competition while evading antitrust enforcement under the actual terms of the antitrust laws, nor has it shown a violation of the antitrust laws. Absent such a showing, the court declines to hold that the policies underlying those laws require invalidating Meta’s terms of use.”
Spero also found that BrandTotal’s legacy products continued to access Facebook and Instagram after Meta disabled its accounts in 2020 through February 2021 in violation of the federal Computer Fraud and Abuse Act and California’s Computer Data and Access Fraud Act.
“Once Meta revoked BrandTotal’s authorization to access its platforms, BrandTotal’s continued use of its various programs to actively collect data while panelists were logged into Facebook—which it had the power to stop, but did not before February of 2021—violated the CFAA,” he wrote.
Facebook also won summary judgment on its claim that BrandTotal accessed password protected pages on Meta’s platforms using fake user accounts in violation of the CFAA or CDAFA, though Spero found it a stretch to claim BrandTotal’s Restricted Panel Extension also violates those anti-hacking laws when it solicits third parties to visit restricted pages while logged into their personal Facebook accounts.
But it lost on its claims for CFAA violations with respect to UpVoice 2021 and BrandTotal’s access to non-password-protected pages on Meta-owned websites.
In an email Tuesday, BrandTotal attorney Rudy Telscher of Husch Blackwell in St. Louis said Spero’s ruling conflicts with a Ninth Circuit decision that kept LinkedIn from blocking would-be competitor hiQ from scouring its user profiles for data.
“We believe it is in conflict with the Ninth Circuit’s ruling in hiQ v. LinkedIn,” Telscher wrote, adding that the case turns on whether 3.2.3 and 4.2 are unenforceable as against public policy and whether collecting public data violates the CFAA. “We believe Facebook’s terms of service effectively strip users of the right to control data that they own under California law, wipe out all competition in the social media data analytics space, and restrict the free flow of what is effectively public information. These issues will be considered by the Ninth Circuit de novo."
Spero wrote that the hiQ decision turned partially on the Ninth Circuit’s public policy concern “that giving companies like LinkedIn free rein to decide, on any basis, who can collect and use data—data that the companies do not own, that they otherwise make publicly available to viewers, and that the companies themselves collect and use—risks the possible creation of information monopolies that would disserve the public interest,” but found the cases differed because hiQ also brought a claim for unfairness under California's Unfair Competition Law, “an antitrust theory that BrandTotal attempted to pursue but failed to support here.”
The hiQ case also involved a motion for a preliminary injunction, which a judge has discretion to grant or deny. Spero said he is not required to show that degree of deference to public policy in considering whether to hold a contract unenforceable, especially since BrandTotal did not show how Meta's conduct harms competition.
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