Retailers are increasingly using data mining techniques to determine prices charged by competitors and then meeting or beating these prices instantaneously. Whether these techniques will survive the next couple of years is an open question. Like in the airline industry, where prices fluctuate and nobody knows the "true" price of anything, prices today fluctuate by more than 300 percent over the course of an hour based on data collected and analyzed by various pricing companies. Big data is cool and awesome, and it can help retailers compete. But depending on where the big data comes from, it can also land you in federal prison for computer hacking and trespass—even if that data is right there on a competitor's Web site.
These firms overwhelmingly get this data from the same place anyone would—the Web sites or apps that are "publicly accessible." This would be the same thing as sending out "secret shoppers" to competitors' stores to scope out prices and report them back. Perfectly legal, right?
Not so fast. We all assume that it is legal to enter a store and jot down (or memorize) the prices that are there in plain view, whether it is a brick-and-mortar store or an online merchant. But that may not actually be the case.
(Related story: " Is It Too Radical To Rethink Pricing Optimization Strategy? Hint: If The Answer Wasn't 'Yes,' Would We Have Even Bothered To Ask The Question?")
Take the case of Ronald Kahlow, who entered a Reston, Va., Best Buy that had advertised it had the lowest prices. Kahlow used his computer at the store to enter prices so he could comparison shop. When asked by a clerk to stop, he refused and was arrested—not for comparison shopping but for trespass. His "right" to be in the store was contingent on his following the "rules" of the store. Break the rules, and that right is revoked. And voilà! Criminal trespass. Even though Best Buy had no rule against comparison shopping, when the clerk asked Kahlow to stop and he refused, he was at that instant "remaining unlawfully" and, therefore, violating Virginia trespass laws.
Many online merchants, including Amazon, Walmart and Target, expressly prohibit companies from accessing their pricing data by "robot" or other data mining tools. Some may go so far as to expressly prohibit competitors from using data they see for competitive purposes. Amazon’s site says:
"Amazon or its content providers grant you a limited, non-exclusive, non-transferable, non-sublicensable license to access and make personal and non-commercial use of the Amazon Services. This license does not include any resale or commercial use of any Amazon Service, or its contents; any collection and use of any product listings, descriptions, or prices; any derivative use of any Amazon Service or its contents; any downloading or copying of account information for the benefit of another merchant; or any use of data mining, robots, or similar data gathering and extraction tools."
Translated from lawyer to human speech, this means that a commercial entity (e.g., a competitor or data miner) may not look at the Amazon Web site and, in particular, may not collect prices for the benefit of another merchant.Walmart has similar language, noting:
"All materials that are part of this Site (collectively, the "Contents") are intended solely for personal, non-commercial use. You may download or copy the Contents and other downloadable materials displayed on the Site for your personal use only. You agree, further, not to use or attempt to use any engine, software, tool, agent or other device or mechanism (including without limitation browsers, spiders, robots, avatars or intelligent agents) to navigate or search this Site other than the search engine and search agents available from Walmart.com on this Site and other than generally available third party web browsers (e.g., Netscape Navigator or Microsoft Explorer)."
And Target itself notes:
"YOU MAY NOT: a. Make any commercial use of the Site or its Content, including making any collection or use of any product listings, descriptions, prices, or images; b. download, copy, or transmit any Content for the benefit of any other merchant; c. use or attempt to use any engine, software, tool, agent, data, or other device or mechanism (including browsers, spiders, robots, avatars, or intelligent agents) to navigate or search the Site other than the search engine and search agents provided by Target or generally publicly available browsers."
This type of "civil trespass" or "trespass to chattels [things]" allows the recovery of damages. But, remember, trespass is also a crime.
Courts have frequently held that if you exceed the scope of your authorization to use a computer (or access a Web site), then you are violating the computer crime statute. Thus, an employee who looks at corporate data for a bad purpose may violate the computer crime statute by "trespassing." A woman who provides inaccurate information to a social networking site to get access to the site violates the statute if the site requires accurate information, and she can be criminally prosecuted for doing so.
All of this is to say that in collecting and analyzing what you think is "public" data, you need to make sure that it is, in fact, truly public—and that you have the right to.
If you disagree with me, I'll see you in court, buddy. If you agree with me, however, I would love to hear from you.