Isp Charged With Intercepting Customer Email, Possessing Unauthorized Password Files - ALIBRIS - Company Business and Marketing

EDP Weekly's IT Monitor, Nov 29, 1999

An Internet bookseller which also operated an Internet communications service was charged in federal court last week with intercepting electronic communications and the unauthorized possession of password files.

A criminal "Information" was filed in US District Court in Boston charging ALIBRIS of Emeryville, Calif., with ten counts of unlawful interception of e-mail messages and one count of unauthorized possession of passwords with intent to defraud.

The Information alleges that ALIBRIS' corporate predecessor, INTERLOC INC. was an online bookseller, and also operated a business called Valinet, which provided Internet service in the Greenfield, Mass., area. INTERLOC provided e-mail service to its customer book dealers. The Information alleges that for periods of time between January and June 1998, ALIBRIS/INTERLOC intercepted e-mail messages directed by online bookseller Amazon.com to ALIBRIS/INTERLOC bookseller clients which had INTERLOC e-mail addresses.

The idea, allege prosecutors, was to gain competitive commercial advantage for ALIBRIS/INTERLOC's own online book-selling business by compiling a database of dealers' purchases and analyzing the book- selling market. In January of 1998, INTERLOC altered its e-mail service so that it automatically intercepted and stored e-mail addressed from Amazon.com to INTERLOC's book dealer customers. The Information alleges that "in a matter of weeks INTERLOC intercepted and copied thousands of e-mail communications to which INTERLOC was not a party and was not entitled."

The Information also alleges that INTERLOC "obtained and retained unauthorized copies of the confidential and proprietary password files and customer lists of its competitor Internet service providers."

According to US Attorney Donald Stern, "In this case, an Internet service provider intercepted mail passing through its network to gain a business advantage. The continued growth of e-commerce depends on the security of electronic transactions. We are committed to prosecuting the electronic theft of valuable intangible business property with the same vigor we have applied to the theft of valuable physical property in the past."

ALIBRIS/INTERLOC faces a maximum penalty of $250,000 on each count of the Information. As part of a plea agreement with the US Attorney's Office which must be approved by a US District Court Judge, ALIBRIS has agreed to pay a $250,000 fine.