SW Legal studies in Business

Computer Fraud and Abuse Act Applied to Firm That Scraped Competitor's Website
Description Appeals court upheld the application of the Computer Fraud and Abuse Act in a case where former employees, now in a competing company, used knowledge from their previous employment to be able to scrape proprietary information for commercial gain from their former employer's website.
Topic Cyberlaw
Key Words Computer Fraud; Scraper Software
C A S E   S U M M A R Y
Facts EF is a well-established company that offers student travel services. Several employees left EF to form Explorica to compete in the teenage tour market. They planned to undercut EF on all prices. To obtain prices on all tours, Explorica hired a company to design a scraper program to glean all of the necessary information from EF's website. Because Explorica personnel knew EF tour codes, they were able to have the scraper extract information that members of the public exploring the website could not obtain, coming up with 30,000 bits of information on prices. Once it had the prices, Explorica printed similar brochures, offering the same tours at lower prices. EF learned of the information scraping and obtained an injunction against the practice under the Computer Fraud and Abuse Act (CFAA) because EF showed that it incurred a loss due to the use of the scraper. Explorica appealed.

Affirmed. The information learned by using the scraper program on the website included proprietary information about the structure of the website and the tour codes. There was an abuse of proprietary information that goes beyond any authorized use of EF's website. The former EF employees that engaged in this work violated their confidentiality agreement they had signed when they worked at EF. An outsider could not, without massive effort, have extracted the information that was obtained because of the former employees' knowledge of EF operations. Even if there was no damage to the EF website, its website had been compromised by a competitor in violation of the CFAA. That statute allows suit to be brought when one suffers a loss of business, goodwill, and the cost of diagnostic measures EF took after it learned of the breach of its website.

Citation EF Cultural Travel BV v. Explorica, Inc., 274 F.3d 577 (1st Cir., 2001)

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