Profile Tech Falls Out with Facebook and Sues for Breach
Chris Claydon, the ManagingDirector of a New Zealand based company, Profile Technology, Ltd. (Profile Tech.),has brought suit against the social networking giant, Facebook, allegingbreach of contract, interference with business relationships, defamation, andunlawful, unfair and fraudulent business practices. Claydon’s Complaint alleges that ProfileTech. and Facebook entered into an agreement in 2008 allowing Profile Tech. toacquire Facebook data by automated “crawling,” for the purpose of creating a service called Profile Engine. Profile Engine becamethe world’s first search engine dedicated to Facebook. However, according to the Complaint, withoutnotice, Facebook cut off the access Profile Tech. needed to continue itsventure shorty after October 13, and began a “malicious” defamation campaign,thereby damaging Profile Tech.’s business and reputation.
Claydonclaims the agreement was partially written (via emails) and partially impliedthrough the parties’ conduct, As consideration, Facebook gained a searchengine more powerful than any of its own tools. According to the Complaint, after months of disruption, Facebook deniedthe existence of an agreement maintaining that Profile Tech.’s data wasobtained without authorization and that Profile Tech. sold the information to background serviceswithout Facebook’s or its users’ permission. When Profile Tech confronted Facebook, the latter allegedly wrote a letter toProfile Tech. demanding that it “go out of business” and threatening that if it did not do so, “Facebook would escalateits efforts” to punish Profile Tech. When Profile Tech. refused these demands, Claydon contends Facebook did,in fact, punish Profile Tech. by informing Facebook users that Profile Tech was“unsafe” and “spammy,” and disabled both Profile Tech.’s and Claydon’s Facebookpage, which were used to communicate with customers, and indeed, with Facebookitself.
Claydonfurther alleges that Facebook interfered with access to its other applications,independent of Profile Engine (IQ Test, Survey, Polling, etc…) Facebook’s actions were allegedly purposefuland malicious and as such, require punitive damages in addition to compensationfor lost profits and defamation. Inaddition, Claydon requested an injunction to prevent Facebook from any furtherdefamation it is allegedly employing against Profile Tech.
Claydon states thatFacebook breached the implied duties found in every contract: to deal fairly and in good faith, and refrainfrom doing anything that would have an ill effect on, or injure the rights ofthe other party’s receiving the fruits of the contract.
[Christina Phillips & JT]