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The Man Who Stood Up To Facebook

Oct 13, 2016
Originally published on October 14, 2016 9:17 am

There is a man who is a thorn in the side of Facebook — a problem that just won't go away. In 2008, Facebook sued him, saying he was a hacker and a spammer who was putting users at risk. But in a truly bizarre plot twist, he stood up to the Internet giant — and he has become the unlikely protagonist in a battle for your rights online.

Our protagonist

Steven Vachani and I are sitting at a Starbucks because, he doesn't want to say it, but: He doesn't have an office or a home in Silicon Valley anymore.

"I'm passionate about what I believe in and I'm also confident that even when the path is not clear, you know, you'll find a path," he says. "I'm also willing [to] suffer. I think a lot of people have a — they're not adaptable."

Vachani is based in Brazil, where life is more affordable. He flies into San Francisco a lot, though, in an ongoing effort to stay in the tech biz.

He's got a daily routine here: Go on Priceline and look for the cheapest room in town. And when that's too expensive, the 41-year-old with graying hair checks into a youth hostel. "I spent years of my life living in a youth hostel, so it's a place where I feel very comfortable," he says.

Vachani has had very high highs, and very low lows. In 2008, he was the CEO of a hot startup called Power Ventures. Some of the biggest investors in the Valley — the same people who back billionaire Elon Musk — backed him and his vision.

Closed versus open Internet

The Internet was different back then. You could say a war was brewing between two camps: open borders and closed borders. Facebook, he says, wanted closed borders. "Facebook would be this walled garden where everything would be safely stored there, by their definition of safely. And they would decide how you access it — and if and when you could take it out."

Current and former Facebook employees say there's a reason you can't, with the click of a button, grab all your selfies, rants and newborn baby pics. While your data is not Facebook property — it's yours, under the terms of service — the company makes it hard for you to take it and go on purpose.

Power wanted a world where users, not a company, were at the center — where they controlled their own data, and could take it with them wherever they wanted freely.

So that's what Power built: a dashboard for all your social networks. Say you had a LinkedIn, a Twitter, Facebook and MySpace (remember MySpace!). You'd put your usernames and passwords for each into the Power portal. And from there, you could post to any account, grab contacts and pictures, and so on.

Vachani claims his site had about 20 million users at its peak (so people liked it); and the social networks let him be — except for Facebook.

"Their response to us was — was a lawsuit," he stutters as he recounts.

Clever charges

Facebook and Power had heated exchanges in 2008. And on Dec. 30 (call it a late Christmas present), Facebook went into court and filed a complaint.

It included two big charges: one, that Vachani is a hacker, breaking into Facebook's computers without the company's permission. Never mind that Facebook users gave him their names and passwords freely.

Point two — and this caught Vachani off guard — was that he was a spammer. "The word 'spam' is kind of like calling someone a rapist. It has — in [the] digital world — calling someone a spammer is the worst thing you could possibly call them."

It's actually quite clever. The complaint made it sound like Power was sending unsolicited emails to users, possibly from a fake Facebook account. It wasn't true. But that didn't matter. The allegation stuck.

Facebook could have taken a different tack and told users: "Hey, you're not allowed to use this competitor." They set other rules, like telling users not to post nude photos. But that directive would reveal a well-kept secret in Silicon Valley.

"Nobody up until that point had ever had, I think, the courage to publicly say to users that they don't control their data," he says, "and honestly Facebook didn't have the courage to say that.

A window into Facebook

Antonio García Martínez agrees. "That's probably true, yeah. They like the fact that users don't actually read the terms of service. They absolutely love that."

García Martínez used to work at Facebook, as a leader in its ad business, and recently wrote a best-selling book about it called Chaos Monkeys.

He doesn't think much of Steven Vachani's startup, or get how scraping data from someone else's social network is fair or even lucrative. But he does think this little-known standoff is an important window into Facebook.

In dealings with users as well as with advertisers, he says, the company is run by control freaks. "They see Facebook as the end all, be all of your social life. And they expect you to accept that, as a worldview. And this guy's whole product flies in the face of that," García Martínez says.

Hustling for a lawyer

Power Ventures attorney Amy Sommer Anderson says the very first judge in the case didn't get the technicalities. "That's how it seemed. And so he just sort of ate up what Facebook said. Yeah, this sounds complicated!" But, she says, "It's not."

Another judge ruled that Vachani was personally responsible for paying Facebook about $3 million in damages. His life was pretty much blown to smithereens. Vachani tried to declare bankruptcy and Facebook blocked him. His company imploded. Prior counsel walked out on him.

It's in that context he met Anderson, "and he sold it as, you know, it's just an appearance. It's one time. Just a fixed fee, just to keep this from getting thrown out," Anderson says.

Adaptable and resourceful Vachani went on Elance, the site where you find freelancers, and posted about his case — without naming the parties. If he had mentioned Facebook, he says, no one would have been crazy enough to bite.

Anderson had just become a lawyer — she went to law school at night and had never represented anyone before. Her "initial appearance" lasted about a year — and after that, she was not that great at negotiating salary. She says she agreed to a "stupid low rate."

Asked how low, she hesitates to admit: $55 an hour. Facebook-level lawyers get paid more like $1,000 an hour.

But the more Anderson pored over the briefs and decisions, the more she felt an injustice was being done. "I was hooked on the case. It was like crack. I mean, as soon as I was in, I was in," she says.

A little vindication

Vachani and Power kept on losing, badly. Until they got to the 9th Circuit Court of Appeals.

The judges were quite open to hearing him out, and he even got a little praise from Judge Kim Wardlaw, who said his media site was "quite clever."

This summer, the 9th Circuit ended up ruling that Vachani is not a spammer after all. It threw out the very charge that destroyed his life.

Now the parties are fighting over what hacking means — and the case has become about a lot more than Power Ventures and Facebook. It's about how much a company can dictate what you do with your data online — and even if you could be criminally prosecuted for crossing a line.

Criminally because of the law Facebook invoked to sue Vachani, the Computer Fraud and Abuse Act. The CFAA can be used by private companies or by the government, to pursue civil or criminal cases.

Orin Kerr, a law professor at George Washington University, is concerned that this case is a "powder keg of issues." In the Wild West of cyber law, it's not clear what it means to trespass. As the court decision stands now, Kerr says, it gives private companies the power to limit what sites you can visit, and "it might give the government power to arrest you for something you do every day: violate terms of service."

Still, though, Vachani feels some vindication. "It's finally returned to the real issues today, which — they've thrown out everything but the real issues."

NPR spoke extensively with Facebook about the case, and a spokesperson says the company offered Vachani "multiple" chances to resolve its concerns in a way that would not have been "painful" for anyone. He refused. And while he claims he was trying to work with Facebook to resolve the dispute, in an email to his employees, he wrote: "We need to be prepared for Facebook to try to block us and the[n] turn this into a national battle that gets us huge attention." That is, Vachani wanted to pick a fight.

Facebook is not appealing the spam decision and, the spokesperson points out, it has won on hacking so far.

Though now, Kerr and other top-tier lawyers in the country have stepped in to help Power Ventures appeal, free of charge.

Copyright 2016 NPR. To see more, visit http://www.npr.org/.

ARI SHAPIRO, HOST:

There is a man who is a thorn in the side of Facebook. He's a problem that just won't go away. In 2008, Facebook sued this man, said he was a hacker and a spammer who was putting users at risk. But this man stood up to the internet giant, and he's become the unlikely protagonist in a battle for our rights online. NPR's Aarti Shahani has this story.

AARTI SHAHANI, BYLINE: Steven Vachani and I are sitting at a Starbucks because - he doesn't want to say it, but - he doesn't have a home or office in Silicon Valley anymore.

STEVEN VACHANI: I'm passionate about what I believe in, and I'm also confident that even when the path is not clear, you will - you know, you'll find a path.

SHAHANI: Vachani is based in Brazil, where life is more affordable. He flies into San Francisco a lot, though, in an ongoing effort to stay in the tech biz.

VACHANI: And I'm also willing to suffer. I think a lot of people have a - they're not adaptable.

SHAHANI: He's got a daily routine here - go on Priceline and look for the cheapest room in town. And when that's too expensive, the 41-year-old with graying hair and a small paunch checks into a youth hostel.

VACHANI: I spent years of my life living in a youth hostel, so it's a place where I feel very comfortable.

SHAHANI: Vachani has had very high highs and very low lows. In 2008, he was the CEO of a hot startup called Power Ventures. Some of the biggest investors in the Valley, the same people who backed billionaire Elon Musk, backed him and his vision. The internet was different back then. You could say a war was brewing between two camps, open borders and closed borders. Facebook wanted closed borders.

VACHANI: Facebook would be this walled garden where everything would be safely stored there, by their definition of safely. And they would decide how you access it and if and when you could take it out.

SHAHANI: Current and former Facebook employees say there's a reason you can't, with a click of a button, grab all your selfies and rants and newborn baby pics. While your data is not Facebook property, the company makes it hard for you to take it and go on purpose. Power wanted a world where users, not a company, were at the center, where they controlled their own data.

VACHANI: And they can take it with them wherever they want freely.

SHAHANI: So that's what Power built, a dashboard for all your social networks. Say you had a LinkedIn, a Twitter, Facebook and MySpace. Remember MySpace? You put your usernames and passwords for each into the Power portal. And from there, you could post to any account, grab contacts and pictures, etc., etc.

Vachani claims his site had about 20 million users at its peak, so people liked it. And the social networks let him be - except for Facebook.

VACHANI: Their response to us was a lawsuit.

SHAHANI: Facebook and Power had heated exchanges. And on December 30, 2008, Facebook went into court and filed a complaint that included two big charges, one that Vachani is a hacker breaking into Facebook's computers without the company's permission. Never mind that Facebook users gave their names and passwords freely. Point two - and this caught Vachani off guard - was that he was a spammer.

VACHANI: The word spam is kind of like calling someone a rapist. It has, in the world of a digital world, calling someone a spammer is the worst thing you could possibly call them.

SHAHANI: It's actually quite clever. The complaint made it sound like Power was sending unsolicited emails to users, possibly from a fake Facebook account. It wasn't true, but that didn't matter. The allegation stuck. Facebook could have taken a different tack, told users, hey, you're not allowed to use this competitor - they tell users not to post nude photos - but doing that would reveal a well-kept secret in Silicon Valley.

VACHANI: Nobody up until that point had ever had, I think, the courage to publicly say to users that they don't own and control their data. And honestly, Facebook didn't have the courage to say that.

ANTONIO GARCIA MARTINEZ: It's probably true, yeah. I mean, they like the fact that users don't actually read the terms of service (laughter). They absolutely love that. That's right.

SHAHANI: Antonio Garcia Martinez used to work at Facebook as a leader in their ad business and recently wrote a best-selling book about it called "Chaos Monkeys." Garcia Martinez doesn't think much of Steve Vachani's Power startup. He doesn't get how scraping data from someone else's social network is fair or even lucrative. But he does think this little-known stand-off is an important window into Facebook, which he says is full of control freaks.

GARCIA MARTINEZ: They see Facebook as the end-all, be-all of your social life, and they expect you to accept that (laughter) as a worldview. And this guy's whole product flies in the face of that.

SHAHANI: Power Ventures attorney Amy Anderson says the very first judge in the case didn't get the technicalities.

AMY SOMMER ANDERSON: That's how it seemed, and so he just sort of ate up what Facebook said. Yeah, this sounds complicated - it's not.

SHAHANI: Another judge ruled Vachani had to personally pay Facebook $3 million dollars in damages. His life was pretty much blown to smithereens. He tried to declare bankruptcy, and Facebook blocked him. His company imploded. Prior counsel walked out on him. And it's in that context he met Anderson.

ANDERSON: And he sold it as, you know, it's just an appearance. It's one time, you know, just a fixed fee just to keep this from getting thrown out.

SHAHANI: Adaptable and resourceful Mr. Vachani went on Elance, the site where you find freelancers, and posted about his case without naming the parties. If he mentioned Facebook, he says, no one would be crazy enough to bite.

Anderson had just become a lawyer. She went to law school at night and had never represented anyone before. And she was not that great at negotiating salary. She agreed to a stupid low rate.

ANDERSON: A stupid low rate.

SHAHANI: Fifty-five dollars an hour. Facebook-level lawyers get, like, a thousand an hour. But the more Anderson pored over the briefs, the decisions, the more she felt an injustice was being done.

ANDERSON: I was hooked on the case. It was like crack. I mean, as soon as I was in, I was in.

SHAHANI: Vachani and Power kept on losing - badly - until, that is, they got to the 9th Circuit Court of Appeals.

(SOUNDBITE OF ARCHIVED RECORDING)

VACHANI: Good morning, your honor.

SHAHANI: That's Vachani in court last December. You're hearing the recording.

(SOUNDBITE OF ARCHIVED RECORDING)

VACHANI: My name is Steven Vachani.

SHAHANI: The judges were quite open to hearing him out.

(SOUNDBITE OF ARCHIVED RECORDING)

KIM WARDLAW: Were you the one who invented this media site?

SHAHANI: He even got a little praise from Judge Kim Wardlaw.

(SOUNDBITE OF ARCHIVED RECORDING)

VACHANI: One of the...

WARDLAW: I actually I think it's quite clever.

VACHANI: I was the founder...

SHAHANI: This summer, the 9th Circuit ended up ruling Vachani is not a spammer after all. They threw out the very charge that destroyed his life. Now the parties are fighting out what hacking means. And the case has become about a lot more than Power Ventures and Facebook. It's about how much a company can dictate what you do with your data online and even if you could be criminally prosecuted for crossing a line. Already though, Vachani feels some vindication.

VACHANI: It's finally returned to the real issues today, which - they've thrown out everything except the real issues.

SHAHANI: NPR spoke extensively with Facebook about the case. And a company spokesperson says they offered Vachani multiple chances to resolve it in a way that would not have been painful for anyone. He refused.

Facebook is not appealing the spam decision, and, the spokesperson points out, they've won on hacking so far. Though now, some of the very best lawyers in the country have stepped in to help Power Ventures to appeal free of charge.

Aarti Shahani, NPR News, San Francisco. Transcript provided by NPR, Copyright NPR.