Bright Data countersues Musk’s X, accusing it of monopolizing public data access
Bright Data countersues Musk’s X, accusing it of monopolizing public data access
The Israeli firm claims X is blocking competitors while leveraging data to bolster its AI ambitions.
Bright Data has hit back at Elon Musk's X, accusing the tech mogul's platform of weaponizing anti-competitive tactics to create an "information monopoly." The Israeli data company has filed a counterclaim, challenging X's allegations of improper data scraping and fraud. Bright Data argues that Musk's real goal is to restrict public access to information while leveraging it for his own ventures, turning the $44 billion acquisition of Twitter into a $60 billion empire.
Bright Data specializes in business intelligence by collecting and processing publicly available information on the web. Its methods include the massive collection of data from personal profiles on social networks—a practice known as scraping. In July 2023, this practice became the focus of a lawsuit filed by X which claimed that “Bright Data scrapes and sells millions of records from X Corp.’s X platform, in blatant violation of X Corp.’s terms of service.”
X added that “Bright Data also induces and facilitates other X users to violate their own agreements with X Corp. by selling automated data-scraping tools and services that specifically target a wide range of X Corp. data.”
In May, the court dismissed the lawsuit, ruling that X failed to substantiate its claims and that there are legal precedents permitting Bright Data's activities. “Our court of appeals has held that giving social media companies ‘free rein to decide, on any basis, who can collect and use data — data that the companies do not own, that they otherwise make publicly available to viewers, and that the companies themselves collect and use — risks the possible creation of information monopolies that would disserve the public interest’,” Judge U.S. District Judge William Alsup wrote in his decision.
However, in November, the judge allowed X to refile some of its claims against Bright Data, alleging improper access to X's servers, fraudulent business activity, and unauthorized use of sophisticated methods to access X's platform. On the other hand, X had to drop its claims related to scraping and selling information, as the court ruled that such activity is permissible under copyright law. Instead, X's revised lawsuit now focuses on claims that Bright Data's actions placed an unreasonable load on its servers.
“Unlawful data scraping requires X to spend [redacted] buying excess server capacity to absorb the unwanted scraping requests with which Bright Data bombards its servers. Bright Data’s circumvention further degrades the user experience on X’s platform by spreading fake accounts and promoting spam. It threatens X user privacy by allowing real-time automated surveillance of user activity. And it deprives X of the revenue it would obtain if developers paid for legitimate access through X’s Application Programming Interfaces,” the lawsuit states.
In its defense, Bright Data rejected these claims, stating: “Bright Data does not know how X makes decisions about server expenditures, but it does not spend [redacted] to “absorb” Bright Data’s requests. It doesn’t even spend an extra penny. Nor do Bright Data’s services “degrade the user experience” on X. To the contrary, Bright Data’s process is reliant on ensuring that the host website functions exactly as intended, with no degradation, delay, or performance issues. Bright Data does not use fake accounts (or any accounts) when scraping websites and does not “spread fake accounts” or “promot[e] spam.” Nor does Bright Data threaten user privacy; Bright Data only scrapes public information. Indeed, X threatens its users’ privacy to an exponentially greater degree by selling access to information that users deem private, and by preventing users from opting out of the use of their private information for many purposes, including X’s A.I. Chatbots.”
Simultaneously, Bright Data filed a counterclaim, accusing X and Musk of violating antitrust laws. “Upon taking control of the company, X engaged in a multifaceted scheme to extract value from data it does not own. The scheme worked. Between X and its sister company, Musk’s $44 billion investment, which seemed so foolish at the time, has now ballooned to over $60 billion in just two short years. It would not have been possible absent X’s exclusionary and anticompetitive practices.”
Bright Data alleges that Musk founded xAI in July 2023 to capitalize on the generative AI revolution, intending to use the vast amount of public data generated by X to train the company’s AI models. “But Musk faced a problem—X does not own this information, most of which is public. X cannot prevent others from using it freely. He needed a way to remove this data from the public domain,” the counterclaim asserts.
To achieve this, Musk allegedly employed several tactics. First, X attempted to make its information accessible only to registered users, a policy the company abandoned after Meta launched Threads, its X competitor. Next, according to Bright Data, Musk revised X's terms of use to grant the company unrestricted rights to feed data into Grok, xAI’s model, while prohibiting other companies from scraping X's data.
“X’s Terms are even more nefarious. They purport to prevent millions of people and businesses not just from accessing or scraping X’s platform, but from doing business with X’s competitors: companies that provide access to and sell public data on X,” Bright Data claims. “According to X, the “Terms prohibit selling any content collected from the platform,” prevent any users from “using” the content without express permission, and prevent anyone from “facilitating” any of the foregoing. 12 These provisions, X says, prevent anyone bound by the Terms from purchasing the data from anyone other than X. It creates de facto exclusive contracts covering nearly the entire market. That is the definition of exclusionary conduct.”
Bright Data also highlighted what it called hypocritical behavior by Musk’s companies. “In May of this year, X, through its sister company, xAI, needed to obtain additional third-party data to help train its A.I. models. It sought out Bright Data, requesting use of Bright Data’s proxy service and scraping tools to scrape third-party websites, including sites that have Terms of Use similar to X’s. X turned to Bright Data precisely because it provides a valuable and lawful public service. So when X runs to Court, claiming that these same services are illicit when used by X’s competitors, it does so with unclean hands.”
Bright Data further argues: “Since X embarked on its monopolistic scheme, it has limited the public’s access to public data, drastically raised the price of its data subscriptions, and hoarded the data for its most valuable use case for X’s own, exclusive benefit. Its conduct poses a dangerous threat to the availability of online information, the world economy, consumers, data customers, competing platforms, and data competitors, including Bright Data. If X wants to compete in the data market, it is certainly free to do so. But it cannot obtain a $60 billion information monopoly by eliminating competing data sources. Its antitrust violations must come to an end.”
Bright Data has requested that the court declare X's actions illegal, prohibit X from continuing its monopolistic practices, and award Bright Data unspecified punitive damages.
