Everyone knows that CoStar is a litigious company. And that all the cases boil down to CoStar claiming data theft and most end with CoStar winning. But the CoStar Xceligent battle is a doozy – and not just because of Xceligent’s counter-suit. There’s a huge amount of press coverage and marketing campaigns by both parties to gin up support for their side. If you’re having trouble keeping track, I’ve written an FAQ to get you up to speed.
Did Xceligent Steal CoStar Data?
While similar data resided in the CoStar product database, the data was being scraped from LoopNet which until recently had its own database. It’s not clear whether Xceligent “researchers” were using paid search accounts to do this. What appears more likely is that they were signing up for “free” LoopNet accounts to view Premium listings.
By consolidating all data into the CoStar product and pushing it out to the LoopNet marketing platform, technically, the data “belongs” to the CoStar product. And both LoopNet’s and CoStar’s terms of service strictly prohibit the use or distribution of their data – even by the agent that provided it – for direct or indirect use/distribution into another database or product.
Why did you create LoopNet accounts? Just search the site on Google (site:www.loopnet.com/Listing/) and use the “time” filter to get the newest listings. Skip the photos and modify some of the data to avoid CoStar data manipulation traps. Or better yet, go to the brokerage site to check for the inconsistencies.
So…CoStar Won, Right?
The suit against Xceligent is ongoing, but RE BackOffice, a subcontractor for Xceligent, settled with CoStar after admitting to copying data. RE BackOffice was ordered to pay the compensation they received from Xceligent to CoStar.
Squeezing a small vendor like BackOffice to fess up will certainly bolster CoStar’s suit against Xceligent.
0 Xceligent (and RE BackOffice)
RE BackOffice issued a statement saying they were not involved in data theft and were caught in the middle of a fight between two giants. The point being that copying data is not the same as data theft. Xceligent supported RE BackOffice claiming that CoStar bullied them into settling.
What’s Up with the Off-Shore Sweatshop and Sex Trafficking Site?
CoStar raided Avion’s, an overseas Turk-like operation, Philippine’s office late in 2016. While examining their computers for data theft, they discovered work done on behalf of the notorious website BackPage. Xceligent denies knowledge of Avion’s other activities, but CoStar claims to have sworn testimony from Avion employees stating that Xceligent was aware of their association with BackPage.
CoStar is hammering the point that it’s a US company employing thousands of US citizens, while Xceligent not only out-sources work but is owned by a foreign company, DMGI, which is actually a US based subsidiary of the British company DMGT.
Really bad optics. But financially shaky and behind in the data war with CoStar, Xceligent didn’t have much choice but to contract lower wage contractors.
What About Xceligent’s Counter-suit Against CoStar?
CoStar claims that Xceligent’s counter-suit is a lame attempt to disguise their guilt and association with an unsavory internet company. Former Xceligent CEO Curry, however, sees it as a crusade against CoStar’s monopolistic behavior. Current Xceligent CEO, Frank Anton, though admitting to not having Curry’s passion for the cause, is not expected to drop the counter-suit.
Specifically, Xceligent is accusing CoStar of deploying tactics that inhibit agents from information sharing with other data providers. These tactics include data manipulation and data blocking practices. Additionally, Xceligent claims CoStar is in violation of the restrictions placed on them by the FTC in 2012.
CoStar has structured things as well as they can to protect their data, but even though LoopNet listing data is interchangeable with CoStar product data (for the most part…there are a few exceptions) agents expect the listings they pay to display on LoopNet are available to the public. And public data is just that. Public.
A recent court case could provide some support to Xceligent’s monopoly argument. It involved startup company, HiQ Labs who was barred by LinkedIn from scraping public profiles to use in their analytics software. HiQ argued that since search engines could index public profiles, why couldn’t they? The court agreed.
But…Doug Curry Getting Fired from Xceligent!
Curry said he stepped aside to pursue other opportunities. New Xceligent CEO, Frank Anton, hinted that financial considerations were at play but he asserted that the litigation with CoStar was not a factor.
No matter what the reason for Curry’s departure, CoStar chose to applaud Xceligent for firing the contentious Curry and “doing the right thing”. For good measure (and to kick Xceligent while they’re down), CoStar went on a marketing blitz that included sending UPS Express packets to many brokerages full of unflattering press about Xceligent.
More bad optics since the departure took place the day after RE BackOffice settled with CoStar.
More additions as events warrant…stay tuned!