Antitrust Law Daily Wrap Up, ANTITRUST—N.D. Cal.: Data scraper’s Sherman Act claims against X-Corp. may move forward, (Apr 21, 2025)

By Thomas K. Lauletta, J.D.

Allegations of violations of California law could also move forward, but fraudulent interference claims were dismissed.

The federal district court in San Francisco, California denied motions to dismiss a lawsuit filed by X Corporation (formerly known as Twitter) against data scraper Bright Data. X corporation claimed that Bright Data violated contract and other laws by scraping X content. Bright Data counterclaimed, alleging unreasonable restraints of trade and monopolization or attempts, as well as analogous claims under the antitrust laws of California and Texas. The court found that Bright Data alleged a plausible product and geographic market (sales of public-square data in the U.S.) and that X’s exclusionary contracts plausibly foreclosed competition for selling into a substantial share of this market. X Corp. argued that merely was using its right to refuse to deal with anyone, any way it chooses. However, the court found that X Corp. was doing more than merely refusing to deal with scrapers. X Corp. forced its own customers not to deal with scrapers, in perpetuity, which may violated the Sherman Act (X Corp., Inc. v. Bright Data Ltd., No. 3:23-cv-03698-WHA (N.D. Cal. Apr. 18, 2025)).

X corporation operates the social media company formerly known as Twitter. Bright Data is a data scraper, which uses automated processes to extract information from websites, such as X, and sell the information to third parties. Prior to X’s acquisition of Twitter in 2023, Twitter made over 90 percent of its revenue from selling advertising. Its users were allowed to share its content free of charge. In doing so, Twitter knowingly allowed these third parties to “crawl” its website and “scrape” its content.

After several aborted attempts to restrict data scrapers from using and selling its content, X Corporation now seeks to do so by changing X’s Terms of Service. According to Bright Data’s allegations, X’s Terms of Service now forbids scaping of its data without express written permission, forbids third parties from assisting others to violate the Terms of Service and provides liquidated damages for such violations. Bright Data alleges that X Corp. uses the terms to frighten prospects and restrain customers from doing business with scrapers like Bright Data.

X corporation claimed that Bright Data violated contract and other laws by scraping X content. Bright Data counterclaimed, alleging unreasonable restraints of trade under the Sherman Act’s Section 1 (Claim I) and monopolization or attempts under Section 2 (Claims II—III), as well as analogous claims under the antitrust laws of California and Texas (Claims IV, VII) and the still-broader trade practices laws of California and Nevada (Claims V—VI). Finally, Bright Data alleges tortious interference with customer relationships under the common laws of these various states (Claim VIII). X then moved to dismiss all of these counterclaims for failure to state a claim under Federal Rule 12(b)(6).

Sherman Act Section 1. The court noted that under Section 1 of the Sherman Act, “restraint of trade” means “unreasonable restraint.” The court noted that Claim I plausibly alleged that X’s exclusionary contracts foreclosed competition for selling into a substantial share of the market, and that the anticompetitive effects of the contracts could not be avoided because customers could not readily leave X’s agreement. Accordingly, Bright Data plausibly alleged that X violated Section 1 of the Sherman Act.

Sherman Act Section 2. The court stated that Bright Data’s counterclaims also stated a plausible claim for relief from monopolization and monopoly attempts. The court noted that even where vertical foreclosure theories have not prevailed under Section 1, monopolization theories involving the same conduct have on occasion been sustained under Section 2. Although the court saw some of X Corp.’s objections to Claim 2 as “well-taken,” it concluded that these objections were not dispositive for the purposes of pleading.

Unfair competition. Because Bright Data stated a claim for violation of state antitrust laws, for which X Corp. offered no reason to dismiss, the court held that Bright Data plausibly stated a claim for unlawful and unfair competition.

Fraudulent competition. Regarding the fraudulent competition claims, the court saw Bright Data’s allegations as alleging that X Corps.’ misrepresentations stopped third parties from linking to rival platforms. However, the court stated that even if such misrepresentations were made, it was not clear that they were directly relied upon by Bright Data or Bright Data customers sufficient to establish standing under California Section 1700. Accordingly, the fraudulent competition claims were dismissed.

Tortious Interference. The court held that alleged facts, accepted as true, made it reasonably probable that more than one prospective economic advantage would have been realized by Bright Data but for X Corp.’s interference.

The Case is No. 3:23-cv-03698-WHA.

Judge: Alsup, W.

Attorneys: Andrea Levenson (Haynes and Boone, LLP) for X Corp., Inc. Colin Kass (Proskauer Rose LLP) for Bright Data Ltd.

Companies: X Corp., Inc.; Bright Data Ltd.

Cases: Antitrust StateUnfairTradePractices CaliforniaNews