Meta and moderators agree in Kenya to mediation

Court rules in favor of a web scraper, Bright Data, which Meta had used and then sued

Meta and moderators agree in Kenya to mediation

Image Credits: Chesnot / Getty Images

Meta has lost a claim in its legal battle with an Israeli tech firm Bright Data, which it sued last year for scraping data from Facebook and Instagram via the web. The tech giant, which has a long history of suing data scraping businesses, claimed that Bright Data’s data harvesting was a violation of its terms of service — which Bright Data had agreed to by having accounts on Meta’s platforms. However, a court has ruled in favor of Bright Data on Meta’s “breach of contract” claim, saying that Meta had not presented sufficient evidence that the firm had scraped anything but public data.

The lawsuit was particularly interesting because it revealed that Meta had earlier paid Bright Data to gather data from e-commerce websites to build brand profiles on its platforms. In other words, Meta was a customer of Bright Data’s web-scraping services before it went to sue them, though it used the company’s services for a different purpose. In a related matter, Bright Data had also been accused of collecting personal information about minors pulled from Facebook and Instagram, Bloomberg reported last year.

The court said it denied Meta’s motion for a partial summary judgment on the breach of contract claim because the company had not presented enough evidence that Bright Data scraped non-public data — meaning data that’s not behind a log-in screen or that’s password-protected. Instead, what Meta brought to the court was an example of a dataset Bright Data offered for sale, which included 615 million records of Instagram user data. The dataset sells for $860,000. Meta claimed Bright Data had been collecting and selling “vast” amounts of user data like this dataset, which had included fields like Instagram users’ names, ID, country, post count, bio, hashtags, followers, posts, profile images, business category, email, and more. However, Meta failed to establish that such data could be collected only if Bright Data had been logged into a user account.

In another example of Bright Data’s activity, Meta attempted to show that the firm was in possession of non-public information, but the court decided this didn’t prove logged-in scraping as the data could have been publicly accessible at an earlier time — like before a user changed their privacy settings, for example.

In addition, Meta argued that Bright Data had used tools to circumvent its access restrictions like CAPTCHAs, which proved Bright Data collected data “behind authentication barriers.”

The court disagreed with this, too, saying that using an automated program to bypass a CAPTCHA “is different from accessing a password-protected website” and that “Meta surely understands the difference.”

Even though Meta’s anti-scraping investigation team found that Bright Data had advertised a “scraping browser” that would automate logging into a website and simulating other user action to facilitate automated data collection, the court said this, too, wasn’t sufficient evidence that Bright Data had conducted logged-in scraping in this case.

The court also ruled that both the Facebook and Instagram terms had to be considered separately, and that there was no evidence that Bright Data had used its own Facebook and Instagram accounts when it engaged in data scraping. That means Bright Data was not acting as a “user” of the services at the time it was scraping, but only as a logged-out “visitor.” The court also didn’t find other legal arguments Meta had used convincing enough to rule in its favor on breach of contract.

“We look forward to continuing our efforts to protect user data and are evaluating next steps in the ongoing litigation,” a Meta spokesperson told TechCrunch in light of the ruling.

The tech giant has regularly sued companies that engage in data-scraping operations in an effort to discourage the practice. In October 2022, it settled a case against two other firms, Israeli-based BrandTotal Ltd. and Delaware-incorporated Unimania Inc., which both agreed to a permanent injunction that banned them from scraping Facebook and Instagram data going forward and pay Meta a “significant financial sum,” Meta had said.

The company had also settled in 2020 with the scraping service Massroot8 and in 2022, it sued a clone site operator and a company called Octopus, a U.S. subsidiary of a Chinese national high-tech enterprise that had offered scraping services. Meta won that case, as the court issued a permanent injunction to stop the firm’s data-scraping operations. Last year, Meta sued another scraping-for-hire firm Voyager Labs, which has not yet been decided or settled.

Such data-scraping operations can put user privacy at risk as data collected by web scrapers has been previously leaked online, such as in the case where the personal data from 533 million Facebook accounts was found to have been leaked.

The current case with Bright Data is case No. is 3:23-cv-00077-EMC in the U.S. District Court in Northern California.

The only remaining claim against Bright Data in this case is for tortious interference with contract.

Bright Data shared the following comment from CEO Or Lenchner (emphasis theirs):

When Meta approached us with a demand to stop allowing our customers to collect public data (scraping) from Facebook and Instagram, we decided that the right thing to do was to refuse and resolve this in court because public data should remain public. Despite many efforts by tech giants to exclusively control public information on the internet, common sense prevailed. Public information is public. This has always been our claim, and we are very happy about the decision of the court that supports this approach. Bright Data, as the leading web data collection company, will continue to fight for the basic right to free access to public information on the web.

Updated, 1/24/24, 11:22 a.m. ET with Meta comment, 4:39 p.m. ET with Bright Data comment. 

video games, startups, venture

Video game startups might be a bright spot for VC in 2024

video games, startups, venture

Image Credits: ChooStudio / Getty Images

The global video game industry makes more money each year than movies and music combined. But that doesn’t mean the sector was immune to the macroeconomic impacts of the last few years. Gaming companies have held sizable layoffs, and venture funding to the category hit a five-year low in 2023. But VCs are optimistic that things will turn around this year.

Gaming startups raised $2 billion last year, according to a report from video game-focused VC Konvoy Ventures. 2023’s total was down significantly from 2021, $9.9 billion, and 2022, $6.7 billion.

Many VCs think that 2024 could be a bloodbath for startups, generally, as exits aren’t likely to return to any kind of normalcy until 2025; many companies will run out of money and have to shut down. But video games might be an outlier, according to some VCs.

For one, there were still a lot of positive milestones for the sector in 2023. There were multiple titles released last year that garnered huge audiences, including Baldur’s Gate 3 and Hogwarts Legacy, which each sold more than 22 million copies. Despite a flat year for growth in terms of the overall gaming industry, video games are still projected to grow into a $229 billion industry by the end of the decade.

The category is also changing, which opens the door for startups to launch alongside new trends. As drama around Apple’s App Store fees continues to persist, the industry is moving away from mobile games — which traditionally raised the most venture money — and toward cross-platform games, which are more expensive to make, but more lucrative, too. Unlike some categories, AI is just in its early innings in video games and will likely start to stake its place this year.

Josh Chapman, co-founder and managing partner at Konvoy, said the industry should return to normal growth in 2024. The increase in activity caused by tourist investors coming in due to pandemic-fueled gaming spikes and the crypto folks backing web3 gaming has all retreated. The industry can return to organic growth this year, he said.

“A lot of the web3 and crypto stuff in gaming sort of evaporated last year,” Chapman said. “The lack of web3 gaming companies pitching in the market led to an overall drop in deal flow. That’s one subsector of gaming, everything else stayed pretty strong.”

Ilya Eremeev, managing and general partner at The Games Fund, told TechCrunch that despite the industry coming off of a more challenging year for fundraising there is a lot to be excited about. One of the main things is the amount of developer talent available after the industry shed thousands in headcount through layoffs last year. Plus, compensation for these positions has gone down, which means startups might be able to land top talent in this market.

While some of the tourist investors have exited the space, corporates have remained active and have started to participate more at the early stages. It also goes against the trends in the broader venture space, where corporate VCs participated in the lowest percentage of U.S. deals in 2023 in nine years, according to PitchBook data.

“Strategics in Asia trying to run overseas operations in Europe and in the U.S., especially in Europe, they realized there is a growth opportunity in this region,” Eremeev said. “Sometimes they accumulated a lot of capital, they need to invest and are more open for high-risk deals and they invest in early stage.”

But the biggest trend to watch in video games this year is AI. While the AI frenzy in 2022 sparked a lot of existing companies to tout their AI prowess or a lot of companies to start building fast, it wasn’t as immediate of a jolt to the video game sector, Eremeev said. But companies are starting to launch, and they could have big implications — especially regarding the costs associated with game creation.

This gaming startup tries to show ‘AI + crypto’ is not a fad

Mobile ruled the gaming space for a long time, not just because the games were popular, but because they weren’t as expensive to produce as, say, an immersive data-heavy PC game. This made them more venture-backable. Sofia Dolfe, a partner at Index Ventures focused on gaming, said that watching AI unfold in the video game sector is one of the things she’s tracking the most this year.

“We are at the early innings of AI, it will lower the ability to create something, it will also lower the barrier for some areas of gaming that have been less VC investable,” Dolfe said. “Triple AAA quality games on PC that had really long-form creation cycles, it didn’t lend itself as much with the venture model as mobile games, bringing down those costs we will see a lot of studios being built that leverage that technology that I’m excited about.”

Generative AI embedded in games is another development to watch. There could be really interesting advancements where games can become more of a choose your own adventure in a way if AI allows users to fully control every aspect of the game, including NPCs (non-playable characters). This will of course have to have guardrails and guidelines, Eremeev said.

Interestingly, no investor mentioned AR or VR as an area of growth they are excited about this year. But with the current list of big video game releases set for 2024, and with Disney taking a 15% stake in Epic Games just last week, VC investors may have good reason to be optimistic about this year and video game startups in the long term.

“It’s going to be a very tricky and challenging year for the gaming industry but some amazing opportunities will emerge,” Chapman said. “If you look at Halo, Halo was built in 2001. League of Legends was built in 2009. Tough times produce incredible companies.”

Meta and moderators agree in Kenya to mediation

Meta drops lawsuit against web-scraping firm Bright Data that sold millions of Instagram records

Meta and moderators agree in Kenya to mediation

Image Credits: Chesnot / Getty Images

Meta has dropped its lawsuit against Israeli web-scraping company Bright Data, after losing a key claim in its case a few weeks ago. The social networking giant has a history of waging war against companies that scrape data from its websites and apps, and Bright Data was among the latest to face a legal attack. However, the court recently ruled in favor of Bright Data on a breach of contract claim, saying that Meta hadn’t presented sufficient evidence that proved the firm had scraped anything other than public data. Rather than continue to fight this case, Meta has now dropped the lawsuit, court filings indicate.

Beyond being just another case of web scraping, what made this case particularly interesting was that Meta was a Bright Data customer at one time. That is, the company had provided Meta with data from e-commerce websites to build brand profiles on its platforms. However, when Bright Data scraped Meta’s own data, the company sued.

The court last month ruled for a partial summary judgment on the breach of contract claims because it said Meta didn’t show enough evidence to indicate that Bright Data had scraped non-public data — meaning data behind a log-in screen or a password-protected page. The case delved into how much user data is being collected by third-party firms like Bright Data, who then sell their data collections to other companies, where they can be used for a variety of purposes, including market research, marketing, ad tech, AI training, and more.

In this case, Meta had brought to the court an example of Bright Data’s web-scraping activities — a massive dataset that included 615 million records of Instagram data that sold for $860,000. The dataset included fields like users’ names, IDs, country, post counts, bios, hashtags, followers, posts, profile images, business categories, emails, and more. But the court didn’t believe Meta showed enough evidence that the data could have only been collected by a logged-in user account.

In another example, Meta attempted to show that Bright Data was in possession of non-public information, but the court said this also couldn’t be used to prove logged-in scraping, as Meta claimed, since the information could have been publicly accessible at an earlier time when the scraping occurred.

The court additionally disagreed with Meta that using automated tools to bypass access restrictions, like CAPTCHAs, was the same as accessing a “password-protected website.”

And even though Meta had found Bright Data advertised a “scraping browser” that automated logging into websites to facilitate logged-in data collection, the court said Meta didn’t have evidence that proved the browser was used in this particular case of scraping Meta’s data.

Finally, the court said there was no evidence that Bright Data used its own Facebook and Instagram accounts for scraping, so it couldn’t be held accountable by Meta’s terms of service and other legal policies users agree to. At the time of the ruling, Meta said it was evaluating the next steps in the ongoing litigation.

On Friday, February 23, 2024, Meta filed to dismiss the remaining claim in its lawsuit against the web-scraping firm (a tortious interference claim), “without prejudice,” and waived its right to appeal the prior order that granted summary judgment in favor of Bright Data on the breach of contract claim.

It’s a rare loss on Meta’s part against the industry of web scrapers, which it regularly litigates against to discourage the practice.

In many other cases, Meta has prevailed, including the October 2022 settlement of a case against two other firms, Israeli-based BrandTotal Ltd. and Delaware-incorporated Unimania Inc., which both agreed to a permanent injunction that banned them from scraping Facebook and Instagram data going forward. Both also had to pay Meta a “significant financial sum,” the tech giant had said. Earlier, Meta settled in 2020 with the scraping service Massroot8. And in 2022, it sued a clone site operator and a company called Octopus, a U.S. subsidiary of a Chinese national high-tech enterprise that had offered scraping services. Meta won that case as well, and the court issued a permanent injunction to stop the firm’s data-scraping operations.

Last year, Meta sued another scraping-for-hire firm Voyager Labs, but that case is ongoing.

Bright Data says its case was not dismissed because the parties came to a settlement, as it made no agreement with Meta nor will it make any changes to its conduct. In short, the company believes that Meta’s terms do not apply to the scraping of public information while logged out of an account and that this case upholds its right to do so. However, it also indicates that Meta simply needs to provide better evidence of illegal scraping when taking a web scraper to court, beyond just showing it has Meta’s data to sell and runs a business providing data scraping.

“This concession by Meta is a pivotal moment for Bright Data and the web scraping community. We are thrilled with the outcome of this case, solidifying public information is just that public,” said Or Lenchner, CEO of Bright Data, in an email with TechCrunch. “Bright Data remains committed to keeping public web data freely accessible to everyone. The internet was intended for everyone’s benefit and no single entity or person should claim they own it,” he added.

Meta has been asked for comment but one was not immediately provided.

The company’s lawsuit was case No. is 3:23-cv-00077-EMC and was filed in the U.S. District Court in Northern California.