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On January 14, 2021, Southwest Airlines Co. (“Southwest”) filed a complaint in a Texas district court against an online travel site, Kiwi.com, Inc. (“Kiwi”), alleging, among other things, that Kiwi’s scraping of fare information from Southwest’s website constituted a breach of contract and a violation of the Computer Fraud and Abuse Act (CFAA). (Southwest Airlines Co. v. Kiwi.com, Inc., No. 21-00098 (N.D. Tex. filed Jan. 14, 2021)). Southwest is no stranger in seeking and, in most cases, obtaining injunctive relief against businesses that have harvested its fare data without authorization – ranging as far back as the 2000s (See e.g., Southwest Airlines Co. v. BoardFirst, LLC, No. 06-0891 (N.D. Tex. Sept. 12, 2007), and as recently as two years ago, when we wrote about a 2019 settlement Southwest entered into with an online entity that scraped Southwest’s site and had offered a fare notification service, all contrary to Southwest’s terms.

According to the current complaint, Kiwi operates an online travel agency and engaged in the unauthorized scraping of Southwest flight and pricing data and the selling of Southwest tickets (along with allegedly charging unauthorized service fees), all in violation of the Southwest site terms. Upon learning of Kiwi’s scraping activities, Southwest sent multiple cease and desist letters informing Kiwi of its breach of the Southwest terms. It demanded that Kiwi cease scraping fare data, publishing fares on Kiwi’s site and using Southwest’s “Heart” logo in conjunction with the selling of tickets. Kiwi responded and sought to form a business relationship, an overture that Southwest refused.  According to Southwest, when discussions failed to yield a resolution, Kiwi allegedly continued its prior activities, prompting the filing of the suit.

Two recent web scraping disputes highlight some important issues regarding whether a website owner may successfully allege a breach of contract action against a commercial party that has scraped website content contrary to “clickwrap” and “browsewrap” website terms of use.

In Southwest Airlines Co. v. Roundpipe, LLC, No. 18-0033 (N.D. Tex. Mar. 22, 2019), a Texas district court declined to dismiss Southwest Airlines Co.’s (“Southwest”) breach of contract claim against an entity that scraped airfare data from Southwest’s site in violation of the website terms of use. Southwest brought multiple claims against Roundpipe, LLC (“Roundpipe”) after it discovered that Roundpipe had created a website, SWMonkey.com, that, using scraping, sent consumers notifications if their Southwest ticket prices decreased after purchase (which would presumably allow them to exchange the original ticket for a lower-priced ticket).

Southwest’s website terms prohibited scraping or the use of any automated tools to access its fares or other content. Soon after the launch of SWMonkey, Southwest sent a cease and desist letter stating that Roundpipe was obtaining Southwest’s data in violation of the website terms, among other reasons, and demanded that the site be taken down.  After negotiations and additional correspondence from Southwest, Roundpipe shut down the website and disabled its scraping and fare tracking functionality.

This month, an Illinois district court considered another in the series of web scraping disputes that have been working their way through our courts.  In this dispute, CouponCabin, Inc. v. PriceTrace, LLC, No. 18-7525 (N.D. Ill. Apr. 11, 2019), CouponCabin alleged that a competitor, PriceTrace, scraped coupon codes from CouponCabin’s website without authorization and displayed them on its own website.

After discovering PriceTrace’s scraping activities, CouponCabin sent PriceTrace a cease and desist letter demanding that PriceTrace stop scraping data from CouponCabin’s website.  CouponCabin alleged that PriceTrace continued to access and scrape data from CouponCabin’s website even after the C&D letter was sent. As a result, CouponCabin brought several causes of action against PriceTrace, including claims under the Computer Fraud and Abuse Act (CFAA), tortious interference and breach of contract.

The court found that CouponCabin’s C&D letter had revoked PriceTrace’s access to its site and that PriceTrace’s alleged continued access to the website plausibly stated a violation of the CFAA’s “unauthorized access” provision (18 U.S.C. §1030(a)(2)(C)).  Ultimately, however, the court dismissed the CFAA claims with leave to amend, due to plaintiff’s failure to plead the requisite amount of damage or loss as required to maintain a civil action under the CFAA.

“CouponCabin is simply alleging that PriceTrace was able to circumvent CouponCabin’s website security, with no allegation that such evasion impairs or harm the website. Absent allegation of impairment, CouponCabin has merely alleged that PriceTrace accessed CouponCabin’s website without authorization.”

When Cynthia Hines returned a vacuum cleaner to online retailer Overstock.com, she was reimbursed for the full amount of her purchase, but Overstock deducted a $30 restocking fee, citing a provision in its Web site Terms and Conditions. Hines filed a purported class action in federal court in the Eastern District of New York asserting that she had been advised that she could return the vacuum without incurring any charge, and that she was not aware that a restocking fee would be charged.

When Overstock moved to dismiss or stay the action, citing the arbitration provision in the same Terms and Conditions, Hines similarly argued that she was not aware of the arbitration provision. According to Hines, she was not on either actual or constructive notice of the Terms and Conditions because they were referenced only in a hyperlink in small type at the bottom of the page of the Overstock Web site, between the link to the privacy policy and the Overstock.com registered trademark. She argued: "I did not scroll down to the end of the page(s) because it was not necessary to do so, as I was directed each step of the way to click on to a bar to take me to the next step to complete the purchase."

In Hines v. Overstock.com, Inc., 2009 U.S. Dist. LEXIS 81204 (E.D. N.Y. Sept. 4, 2009), Judge Sterling Johnson, Jr., agreed with Hines, finding that under the law of New York (where Hines resides), or under the law of Utah (where Overstock.com is located), Overstock.com had not carried its burden of providing the existence of a valid arbitration agreement. There was no meeting of the minds sufficient to form a contract, Judge Johnson ruled, because Hines had neither actual nor constructive notice of the Terms and Conditions, as required by the Second Circuit ruling in Specht v. Netscape Communications Corp., 306 F.3d 17 (2d Cir. 2002):

Notably, unlike in other cases where courts have upheld browsewrap agreements, the notice that "Entering this Site will constitute your acceptance of these Terms and Conditions," … was only available within the Terms and Conditions. Hines therefore lacked notice of the Terms and Conditions because the website did not prompt her to review the Terms and Conditions and because the link to the Terms and Conditions was not prominently displayed so as to provide reasonable notice of the Terms and conditions. Very little is required to form a contract nowadays – but this alone does not suffice."

Compare the result in Hines v. Overstock.com with the result in another recent ruling, PDC Laboratories, Inc. v. Hach Co., 2009 U.S. Dist. LEXIS 75378 (C.D. Ill. Aug. 25, 2009), a case involving a transaction between commercial parties. The court ruled that the incorporation of a limitation of damages clause in terms and conditions of sale available via a hyperlink displayed during an online ordering process was not procedurally unconscionable. Relying on Hubbert v. Dell Corp., 359 Ill. App. 3D 976, 835 N.E. 2D 113 (5th Dist. 2005), an opinion involving a consumer transaction, the court concluded that the terms and conditions were conspicuous within the meaning of the Uniform Commercial Code where the hyperlink leading to them was in underlined, blue, contrasting text and was displayed three times during the ordering process. The court further noted that attention was specifically brought to the terms and conditions by a reference in the directions for the "final order step" of the ordering process.

Case law has developed over the years with respect to enforceability of Web site terms and conditions, and the general parameters are now pretty well understood. Courts will, in general, enforce online terms and conditions against consumer users, provided they are given adequate notice and an opportunity for review.

There are numerous exceptions to the general rule, however. Courts often refuse to enforce specific terms in Web site terms and conditions against consumers, particularly where those terms involve class action waivers, arbitration requirements, inconvenient forum choices, and like provisions.

The case of Burcham v. Expedia, involving a pro se attorney’s challenge to the enforceability of the Expedia travel site terms and conditions, is not one of those exceptions.