Data scraping is the use of computer programs to extract data from one source in order to use it elsewhere.
Our client’s solicitor came to us with a report from the Claimant’s forensic accountant setting out the £2.8+ million losses allegedly incurred as a result of alleged unauthorised publication of its content on the Defendant’s website.
Our client was accused of data scraping and reposting details of adverts placed on the Claimant’s website onto its own site. The claim made was that, as a result of the data scraping, the Defendant’s trading and profitability had been seriously affected to the extent that the business may never recover.
Our client accepted that it used data scraping for a period of time. However, it was felt that the impact would have been much smaller than that claimed and there were a multiple factors to be considered that linked to the downturn in the Defendant’s financial performance.
We were instructed to review and comment on the quantum of losses claimed. We were particularly interested in the apparent coincidence between the timing of the data scraping and the financial analysis prepared on behalf of the Claimant. It was clear that causation had been taken as a given due to the timing of events rather than having been considered in full in light of changes in the marketplace.
What we did
We completed market research and reviewed activity data, the performance of the Defendant’s own website, information about online content usage and details of changes in Google search algorithms and technologies used in order to consider the claims made. We found that several key factors had been overlooked including:
- lack of investment in technology over several years prior to the data scraping
- failure to address Google search engine optimisation issues
- failure to develop a mobile friendly website
- a change in the advertising model adopted by key players in the marketplace
- the cost of investment to drive increased revenues
- declining size of the marketplace combined with significant growth in market share of the key player.
In addition, our review of the Claimant’s accounts showed that the company had paid out a significant sum of money to its shareholders in the year in which its financial downturn commenced. The reduction in capital available to invest is likely to have had an impact in the following years.
All our work was undertaken in less than a week and we prepared various alternative calculations of loss to be used by our client for settlement purposes. The claim settled some weeks after a mediation for a small fraction of the sum originally claimed.
For more information
For more information on our forensic accounting service, please contact Kate Hart, or call us on: