Late last week, Kiwi.com Inc. and Kiwi.com S.R.O. filed a notice of appeal with the Fifth Circuit Court of Appeals challenging a September 30 order barring the online travel agency from scraping data from Southwest Airlines Co.’s website. After denying Kiwi’s motion to dismiss in August, the Northern District of Texas court ruled that a preliminary injunction was warranted given the likelihood of Southwest’s success on the merits of its breach of contract claim, the chance of it would suffer irreparable harm, and the weight of the public interest factors.
The January 2021 suit alleges that Southwest retains exclusive online distributor rights to sell its tickets. Kiwi transgressed the airline’s terms of use by scraping flight data from its pages for commercial purposes. Specifically, Kiwi purchased tickets directly from Southwest’s website and then resold the flights to more than 170,000 customers.
Kiwi allegedly padded Southwest’s fares and charged additional fees on those tickets. The airline notified Kiwi of its alleged violations through cease-and-desist letters, but apparently to no avail. The suit states claims for violation of the Computer Fraud and Abuse Act (CFAA), the Texas computer crime statute, and for breach of contract and trademark infringement.
“Kiwi breached the Terms by scraping Southwest flight data and fare from Southwest’s website, presenting Southwest flight data on kiwi.com, and selling Southwest flights without authorization,” the court opined as to the first step of the analysis. The defendant’s affirmative defenses, laches and unconscionability, did not persuade. As to laches, Kiwi claimed that Southwest waited too long to move for an injunction, rendering it unfair.
As to its second defense, Kiwi contended that “the adhesionary nature of Southwest’s Terms and Conditions, its overreaching and selective enforcement against competitors in the service of a consumer-harming monopoly on flight and fare data, and the overwhelming public interest in preserving the freedom to discuss publicly available information raise serious questions about unconscionability.” The court rejected both summarily ruling that at this stage, Kiwi failed to prove either.
The court also found that Kiwi irreparably harmed Southwest by interfering with customer relations, up-charging flyers, and encouraging them to book problematic “hidden city” fares. The Fifth Circuit will now hear Kiwi’s interlocutory appeal.
Southwest is represented by Munck Wilson Mandala LLP. Kiwi.com is represented by McCarthy Garber Law LLC, Carrington Coleman Sloman & Blumenthal LLP, and Bates PLLC.
