PeopleBrowsr Gets Temporary Restraining Order Against Twitter For 'Felony Interference With A Business Model'
from the someone-else's-bitch dept
For years, we've seen so many legal disputes that could be jokingly described as arguing "felony interference of a business model" -- a term coined by Steven Bellovin a while ago as shorthand for lawsuits that are much more about a company who bet on the wrong business model, than any actual legal wrongs. Normally, this relates to legacy companies upset at upstarts who win through the disruptive judo of taking a totally different approach. But it can be seen in other arenas as well. We've also talked, for example, about how odd it is that some companies appear to base their entire business on what some other company does -- and they seem wholly unprepared for a situation in which the company they are 100% reliant on changes. As venture capitalist Fred Wilson has summarized, a good company can't be someone else's bitch.Both of those concepts seem relevant given the news that a startup called PeopleBrowsr has successfully obtained a temporary restraining order against Twitter for changing how it doles out access to its "Firehose" (i.e., the raw stream of all public tweets). As has been covered widely, over the last few months, Twitter has really clamped down on some of its more open practices lately. I actually agree with many people that I'm not sure this is a smart long-term business move, but I can't see how it could possibly be a legal violation. Yet, that's what PeopleBrowsr appears to be claiming. Of course, its Firehose offering has long been an offering that companies had to work out a deal with Twitter to get access to, so even then it was never fully "open."
As part of the changing business strategy, Twitter has cut off many of its "Firehose" partners, including PeopleBrowsr. In response, PeopleBrowsr sued arguing that this change has a negative impact on PeopleBrowsr's business (apparently true), and thus it must be illegal. The company highlights how it has all sorts of highly valuable deals with other companies because of its analytics of Twitter's Firehose.
PeopleBrowsr's products are highly valuable to its users, who utilize them to extract relevant information from the massive Twitter stream, as well as to organizations marketing their messages or brands. PeopleBrowsr has entered into valid contracts including: (1) a three-year, $3 million contract with defense contractor Strategic Technology Research, (2) a long term, $400,000 contract with Cadalys to build a customized Kred application, (3) a long term, $300,000 contract with Radian6 to incorporate Kred into its products, (4) a long term, $400,000 contract with Badgeville to incorporate Kred into its products, (5) a contract with Mashable to power its mRank product through PeopleBrowsr's API, and (6) a contract for at least one year with DynamicLogic, worth at least $75,000. PeopleBrowsr has business relationships that are likely to ripen into new business with firms including Dell Computer, Demand Media, Ogilvy, Bell-Pottinger, and CBS Interactive, among others.It is not difficult to understand why PeopleBrowsr is upset that Twitter decided to end the relationship, even as PeopleBrowsr claims to pay over $1 million a year to Twitter for access to the Firehose. The key argument that PeopleBrowsr makes, is that Twitter has, in the past, made various statements concerning its embrace of an open platform that allows others to build on top of their work. But I'm not sure why that's actually relevant here. PeopleBrowsr obviously knew that Firehose wasn't completely open since it signed two separate licensing agreements with Twitter (according to its own filing). In fact, they explicitly note that the agreement has a termination provision, so PeopleBrowsr had to know it was a possibility. In addition, most of the statements about openness that PeopleBrowsr cites, are vague statements about the importance of openness. Even the specific comments about keeping Firehose open are things like an engineer noting that he's "fighting to keep access to the Firehose and other API's as open as possible," which should have clearly indicated to PeopleBrowsr that the entire company was not in agreement, and there was a very real chance that it would not remain so open.
In the end, it really seems like the problem is entirely PeopleBrowsr's for building a business in which it relied almost entirely on a single relationship, and did not set up the contract to ensure that relationship would not go away. Again, I'm not sure that Twitter's strategy here is smart, but it's difficult to see how it's illegal. The problems seem entirely self-created by PeopleBrowsr. It even seems to admit that it bet its entire business on this fact, without securing a contract that they knew would last.
The Firehose is an essential input for PeopleBrowsr's business. PeopleBrowsr's products function by creating a comprehensive view of Twitter activity, and a mere sample of Twitter's data is not sufficient to provide the sophisticated analytics PeopleBrowsr's clients have contracted for.All that says is that perhaps they shouldn't have put things in their client contracts that they really couldn't promise they'd have access to -- or they should have put together a much more solid agreement with Twitter in the first place. While PeopleBrowsr may have won a temporary injunction, preventing Twitter from turning off its access to Firehose for the time being, it seems like a massive long shot to think that it can possibly win this lawsuit. Yes, it sucks that the one partner you bet your business on is changing its own ways of doing business, but that's what happens when you bet your business model on being someone else's "bitch."
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Filed Under: business models, contracts, firehose, interference
Companies: peoplebrowsr, twitter
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So...
Sounds legit.
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Well this could be interesting...
Should they refuse, then I can drag them to court for interfering with, and causing harm to, my business! It's a win-win situation!
On a more serious note, can we get a drug-test on whatever judge made this ruling, I'd love to find out what you have to be on to accept the idea that if one company depends entirely on another, and the second company does something the first one doesn't like, that the first actually has any right to order the second about.
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PeopleBrowsr founder has form
The Sydney Morning Herald has a good article covering Jodee and PeopleBrowsr.
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Tweeters?
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Re: Tweeters?
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Re: Re: Tweeters?
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Bitchin' re-write, Mike. 3 times, evidently you like the phrase.
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Re: Bitchin' re-write, Mike. 3 times, evidently you like the phrase.
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Re: Re: Bitchin' re-write, Mike. 3 times, evidently you like the phrase.
Oh look its out of his ass attacking Mike again.
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They want the hose? I say hose 'em.
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Looking at it that way, twitter seems to have been attempting to just get rid of a competitor, by either absorbing them, or removing that which they needed to stay in business, something PeopleBrowser only realized a little too late.
Decidedly shady actions on twitters part, but really, for PeopleBrowser to put themselves in a position that they are totally dependent upon another company, with the other company knowing it, and to then be surprised that the other company attempts to start calling the shots... they really only have themselves to blame for that.
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Re: "Only themselves to blame"
If Twitter lied in order to get money from this company, they are liable. Period. It has nothing to do with PeopleBrowsr's service.
If they find out their contract sucked, they may turn around and sue their law firm, but barring that, let this one ride because it is totally legit.
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PeopleBrowsr sell a product manufactured from materials supplied by Twitter... Twitter have terminated that agreement and will no longer be supplying those materials. How should any government or court be able to force them to continue the supply.
By any reasonable standard it falls to PeopleBrowsr to find a new supplier. If the government want to controll Twitter they should just buy it (and watch everyone leave and join some new site)
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Re:
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4. PeopleBrowser built its business in reliance on Twitter's Promises of Open Data Access [emphasis added]
The alleged promises if proven could fall under estoppel, though this would still not prevent Twitter from totally stopping the feed in its entirety as long as it was equitably done to all. Not just to some individuals, though there could be a reasonableness clause that twitter has done what they provided and due to market and other strategic concerns that at the time could not be reasonably foreseen they can now not honour the promise they originally provided.
I can't see this ending well for PeopleBrowser in any instance.
All the rest of the claims are basically trying to stop twitter doing what it is legally able to do and that PeopleBrowser might be seriously butthurt in the process.. Boo bloody hoo! (And that is the Ego of Rich to a tee!)
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entitlement mentality
They are so used to our laws being tilted in their favor that they have come to believe that society must indemnify them against any risk (though of course, they believe that any success came purely by their own cleverness and "hard work").
We need to get used to this new corporate entitlement mentality, because we're going to see it taken to even more ridiculous levels.
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So why is Twitter turning this off?
The only reasons I can think of are monopolistic in nature. Someone thinks they can make more money if they are the ONLY ones with access to the full Twitter data. I can't imagine this being a good thing.
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Re: So why is Twitter turning this off?
From Twitter's Response (p.17):
(Footnotes and citations to the record omitted; emphasis added.)
All this shouting about the amount Twitter is getting paid! Where's the $550,000 that PeopleBrowsr owes?
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NOOOOO
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Re: NOOOOO
Really?
IANAL either, but an obvious question to ask might be whether there was any sort of contract in place which defined said service and term thereof.
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Will you feelings about this change when Twitter launches their own replacement services for PeopleBrowsr? It's a great business model (for twitter): have innovators take the risk to develop the market, kill them by turning off the tech they depend on, then fill the market void with your own replacement product.
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Re:
From Twitter's Response (p.17):
(Footnotes and citations to the record omitted; emphasis added.)
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PeopleBrowser
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Lawsuits are not primarily about legality.
You can't just take someone's money while promising a future relationship, then change your mind and keep the money. Whether or not Twitter actually did this is the issue at hand, not whether or not it was legal.
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