Kred creator PeopleBrowsr fires back at Twitter and wins temporary restraining order

kred versus twitterPeopleBrowsr, the company responsible for the social analytics service Kred, has filed a complaint against Twitter in the hopes of being able to retain integration with the platform. This lawsuit is also among the first of its kind where a third-party business that invested “millions of dollars and thousands of hours of development time” is fighting back on Twitter’s own turf. And much to our surprise, PeopleBrowsr announced that it had won a temporary restraining order against Twitter.

The problem between Kred and Twitter comes down to the social network’s new restrictive policies that were recently announced and enforced. Plenty of controversy and outrage has circulated around restrictions imposed on access to Twitter’s API, as well as plenty of complaints about the lack of transparency about the types of companies that Twitter will make exceptions for. Twitter could limit tokens for one third-party developer, and turn around to accept a request to offer additional tokens to another. 

PeopleBrowsr, as stated in the complaint filed with the state of California, was about to have Twitter’s full Firehose (which means being able to pull the entire Twitter stream) access revoked by November 30, 2012 – which is tomorrow. PeopleBrowsr says that Kred would only have access to a fraction of the data, which would of course mean Kred scores connected to Twitter would be highly inaccurate.

There doesn’t appear to have been a breach of contract on PeopleBrowsr’s end, so the limited access that Twitter wants to impose comes from far left field. PeopleBrowsr was given a 90-day warning back in July, but the company emphasizes that it was notified without a valid explanation. In bold the complaint states, “Twitter Has Refused to Provide Any Substantive Rationale For Termination.” The only feedback Twitter offered was that the social network was moving toward using third-party syndication services, Gnip and DataSift, for feeding third-party developers with access to the Firehose. However the caveat with going through Gnip and DataSift is that the number of tweets that these syndication services offer PeopleBrowsr is quite limited.

Twitter did fire back with an opposition that sought to diminish PeopleBrowsr’s complaint. The rebuttal starts off by saying, “This is Contracts 101. Although PeopleBrowsr attempts to dress its case up as some sort of grand antitrust case, it is not.” According to Twitter the terms of the contract state that both parties negotiated on a year-by-year basis, and agreed on a 30-day notice should either party choose to terminate the contract. And in response to signing off on its syndication efforts, that move was chalked up to the reasoning that Twitter now has hundreds of companies who have access to Twitter’s Firehose, and to lighten the load of managing these clients Twitter has left that task up to Gnip and DataSift.

The social network doesn’t mince words regarding how it feels about the lawsuit. “What [PeopleBrowsr] is not free to do is insist that Twitter preserve forever its earlier business model, or continue to be bound by a contract that expired more than a year ago.” To conclude the point Twitter adds, “If PeopleBrowsr’s novel view of the law were correct, Twitter would be required to continue to do business with PeopleBrowsr forever. This is not the law.”

PeerIndex founder and CEO, Azeem Azhar’s opinion on the matter, which he told me, seems to support Twitter’s rebuttal half-way. I asked him if Twitter had a responsibility to keep its platform open, which Twitter apparently promised, but he says that Twitter doesn’t have that responsibility to developers. However he adds, “I think it is in their absolute best interests to create a thriving ecosystem of developers and making that ecosystem as accessible as possible. And for the primary reason – that is is in Twitter’s own interest.”

Azhar confirms that Peer Index’s relationship with Twitter has generally been positive. There are some limitations however, “that in some ways limit access to certain resources without authentication, but it still provides a reasonable level of access.” But on this tussle between PeopleBrowsr and Twitter, Azhar offers this parting thought:

“Any business needs to understand it’s reliance of particular suppliers. This is as true for the local gourmet hamburger restaurant as it is for us. Twitter provides data via its API and also via three resellers, DataSift, GNIP and Topsy which creates sum competition in the supply market.”

For the four years Twitter and PeopleBrowsr have worked together, PeopleBrowsr was paying approximately $1 million per year for full access to Twitter’s Firehose. Breaking down the payments might give you an idea about how much PeopleBrowsr’s business relied on Twitter alone; PeopleBrowsr was paying Twitter the greater of:

(a) a minimum monthly fee of $15,000, which would increase by $5,000 per month with a cap of $100,000, or

(b) 25 percent of PeopleBrowsr’s gross revenue, net of third party revenue share.

In the complaint, PeopleBrowsr makes some interesting claims that illustrate the complexity of this issue. First, there’s more than enough evidence to prove that PeopleBrowsr was entering into the partnership with Twitter with the full expectation that Twitter would be open to third-party developers. The complaint lists evidence of Twitter’s intent to be “open” on pages six through eight, which you can read through here. “Twitter has repeatedly and consistently promised that it would maintain an “open ecosystem” for its data, and that Twitter would not use its control over data to pick which companies can succeed and by removing access create losers,” the lawsuit reads.

But there’s the fiscal fall out for not only PeopleBrowsr, which invested “over $5 million and more than 30,000 hours developing products that rely on the full Firehose,” but also its clients. PeopleBrowsr lists six and seven figure contracts with companies including Strategic Technology Research, Radian6, and even Mashable. While PeopleBrowsr won the restraining order that prevents Twitter from cutting off access to the Firehose, it’s just a temporary solution. The hearing is scheduled for January 8, and should PeopleBrowsr lose it won’t only massively impact its business, but set a precedent for the other myriad of clients dependent on Twitter access. 

We’ve reached out to PeopleBrowsr and Twitter and will keep you updated with their responses.

Edit: Added comments by PeerIndex’s founder and CEO.