LinkedIn Corp. may very well succeed in its effort to stop a San Francisco startup from using the data of its members. But the Sunnyvale company, now a division of Microsoft, has certainly lost the moral high ground.

In fact, the job-hunting and networking site is guilty of blatant hypocrisy.

HiQ Labs makes software that analyzes data from public LinkedIn profiles to help employers determine which workers are likely to leave or stay. But at a hearing at U.S. District Court in San Francisco, lawyers representing LinkedIn argued that HiQ was causing significant harm to its business because members expected LinkedIn to protect their privacy.

LinkedIn’s most valuable currency is “trust with customers,” said Donald Verrilli, a partner with Munger, Tolles & Olson law firm in Washington.

That sounds very noble. But the very idea of a social media giant serving as the champion of privacy rights seems suspect.

When a service tells you it’s free, that means it’s making money another way. And more likely than not, you’re the product.

Companies such as Facebook and Twitter make money from advertising enhanced by the personal details they encourage users to reveal.

LinkedIn sells some ads, but one of the biggest way it profits from its members is by selling subscriptions to recruiters, who pay thousands of dollars a year for detailed data about the workers who post online resumes to the site. Those subscriptions include features such as Update Me, which alerts prospective employers to users who modify profiles, a sign that they might be looking for a new job.

“From now on, when they update their profile or celebrate a work anniversary, you’ll receive an update on your homepage,” according to a LinkedIn blog post. “And don't worry — they don’t know you're following them.”

So the company’s argument against HiQ amounts to this: If anyone is going to violate your privacy, LinkedIn should be the one to do it. That’s hardly comforting.

“Frankly, I don’t find it persuasive,” a visibly irritated U.S. District Judge Edward Chen told LinkedIn’s lawyers.

The case no doubt raises significant questions about privacy rights and data use in an increasingly digital society.

In recent years, Silicon Valley’s most powerful companies have been cracking down on firms they suspect of “data scraping,” the practice of extracting information from social media accounts or websites such as Yelp or Wikipedia. LinkedIn, Twitter and Facebook view scraping of the data generated by their users not just as theft — they sometimes charge to license data — but a violation of their users’ privacy, because some information can be limited so not all users can view it.

“This is not just about HiQ,” Verrilli said. “If they can do it, then everyone can do it.”

Back to Gallery LinkedIn, a champion of privacy rights? Don’t buy it 2 1 of 2 Photo: Paul Chinn, The Chronicle 2 of 2 Photo: Richard Drew, Associated Press



There are big issues at stake, which is why LinkedIn and HiQ have hired big legal brains. Verrilli is the former solicitor general for the Obama administration and has argued major cases, including the constitutionality of the Affordable Care Act, before the Supreme Court. Famed Harvard law Professor Laurence Tribe, who was also at the hearing, is advising HiQ.

In May, LinkedIn sent HiQ a letter demanding that it stop using LinkedIn data. HiQ argues that the data are already public. Without it, the company said, it will go under.

HiQ filed suit and sought a preliminary injunction to bar LinkedIn from blocking HiQ while the case proceeds through the courts. LinkedIn agreed to allow access for the time being.

At the hearing, Verrilli said HiQ’s algorithms amount to “surveillance” and “espionage.”

If — and it’s a big if — that fairly describes what HiQ does, how about LinkedIn itself? The company seems to suggest that selling data to recruiters is somehow more morally defensible than selling the same data to employers. By alerting companies to employees who might be looking for another job, HiQ is essentially “ratting” out workers, Verrilli said.

Here are the issues with LinkedIn’s argument: Anyone who makes their profile visible to the public runs the risk of managers, co-workers or anyone else seeing that information. Journalists frequently research and publish information gleaned from social media profiles. The only difference is that companies like HiQ have developed technology that can do it much faster and more broadly than one human could.

“There is no expectation of privacy when the information is published publicly over the Internet,” said Deepak Gupta, a partner with Farella Braun + Martel LLP law firm in San Francisco, who is representing HiQ.

LinkedIn grew to more than 500 million users by encouraging them to think of the site as the one spot to share their professional background. If the data belong to anyone, it’s the users themselves. Their data is a huge reason why Microsoft spent $26.2 billion on LinkedIn last year. If LinkedIn can’t figure out better ways to profit from it than upstarts like HiQ, it makes you wonder what the company is really worth.

The case will have to wind its way through the courts, and the legal talent involved suggests that it could go much higher than Judge Chen’s courtroom. But you don’t need a fancy law degree to figure out that something doesn’t add up here.

Thomas Lee is a San Francisco Chronicle columnist. Email: tlee@sfchronicle.com Twitter: @ByTomLee