An online bookseller and ISP has been fined $US250,000 for intercepting e-mail addresses and passwords sent by Amazon.com and other competing 'Net book retailers and using the information in the e-mails to build up a database of the hottest selling book titles.
Alibris of Emeryville, California, pleaded guilty yesterday in US District Court in Springfield, Massachusetts, to 11 charges alleging the company illegally intercepted e-mails and hacked into the servers of competitors to obtain customer lists, Samantha Martin, a spokeswoman for the court said.
The snooping began at a company called Interloc, which merged with Alibris in May 1998, but Martin said the illegal activity continued after the merger and top executives of Alibris knew about it and approved it. Alibris specialises in selling used, rare and out-of-print books.
In addition to supplying books, Interloc also provided Internet service to the Greenfield, Massachusetts, area through a business unit called Valinet.
In January 1998, Interloc's systems administrator altered the code for the company's e-mail software so that it could intercept and copy e-mail sent to its bookseller ISP customers from Amazon.com, Bibliofind.com and Advanced Book Exchange, Assistant US Attorney Jeanne Kempthorne told the court.
During the first half of 1998, Interloc intercepted and copied thousands of e-mails, according to the prosecutor. The company planned to compile information contained in the e-mails to construct a database of the book dealers' top 100,000 book purchases, Martin said. No confidential customer financial information was obtained, she added.
The systems administrator of Interloc also hacked into the servers of competitor ISPs - Shaysnet, Megatron Data and CrockerCommunications - and gained access to customer lists, Martin said. She did not know what Interloc planned to do with the lists.
Alibris, which cooperated in the investigation, faced a fine of up to $US250,000 per count in the criminal information brought by the US Attorney for the District of Massachusetts, Martin said.
No charges have been brought against Bradford Councilman, senior executive of Interloc, or any other officials of the company, but Martin said the investigation is continuing.
The attorney representing Alibris - Ethan Schulman of San Francisco-based law firm Howard, Rice, Nemerovski, Canady, Falk, & Rabkin - did not return a call seeking comment.