LinkedIn had claimed that another company, hiQ Labs, was illegally downloading information about LinkedIn users to help drive its business. The issue was a concern for LinkedIn, which is owned by Microsoft, in part because many of today's tech companies depend on customer data to compete and even outmaneuver their rivals. As a result, being able to control that information and determine who else can see it is of paramount importance to firms like these.
"Microsoft is further transforming LinkedIn into a data-driven marketing powerhouse that harvests all its data to drive ad revenues," said Jeffrey Chester, executive director of the Center for Digital Democracy.
Where LinkedIn and hiQ clashed was over hiQ's product, which almost exclusively depends on LinkedIn's data, according to U.S. District Judge Edward Chen. HiQ essentially helps employers predict, using the data, which of their employees are likely to leave for other jobs. While this HR tool might sound relatively boring to you and me, it's key to industries whose success depends on recruiting and retaining the best talent. A Gallup survey last year found that 93 percent of job-switchers left their old company for a new one; just 7 percent took a new job within the same organization.
HiQ has raised more than $12 million since its founding in 2012. LinkedIn itself is making moves to develop a similar capability, Chen said, meaning that LinkedIn's attempt to block hiQ from accessing its data could be interpreted as a self-interested move to kneecap a competitor. If hiQ can't get the professional data it needs to fuel its analytic engine, its business could "go under," Chen said.
To allow hiQ access to LinkedIn's data would be a gross violation of LinkedIn users' privacy, LinkedIn argued. But Chen didn't buy it, saying that LinkedIn already chooses to provide data to third parties of its own accord. What's more, he added, people who make their profiles public on LinkedIn probably want their information seen by others, which undermines LinkedIn's claim to be protecting user privacy.
Allowing LinkedIn to selectively block members of the public from accessing public profiles — under penalty of the country's anti-hacking laws, no less — "could pose an ominous threat to public discourse and the free flow of information promised by the Internet," wrote Chen in his ruling.
LinkedIn vowed to keep fighting in court.
"We're disappointed in the court's ruling," it said in a statement. "This case is not over. We will continue to fight to protect our members’ ability to control the information they make available on LinkedIn.”
The case raises deep questions about who truly represents users' interests. From one perspective, LinkedIn is duty-bound to protect its customers' data and prevent it from falling into the wrong hands — perhaps all the more so if, as it appears with hiQ, the information could give employers more leverage over their workers.
But LinkedIn's position requires that it have a tremendous say over how users' own information can be used and distributed. Concentrating power in this way benefits not only LinkedIn, but also the owners of other platforms such as Facebook, Google and other sites that host user-supplied content.
"If LinkedIn's view of the law is correct, nothing would prevent Facebook from barring hiQ in the same way LinkedIn has," said Chen.
That's why this case is so important: How it turns out could set a precedent for the entire Internet, and a global economy that depends on data.