For Immediate Release

November 22, 1999
  INTERNET SERVICE PROVIDER CHARGED WITH INTERCEPTING CUSTOMER COMMUNICATIONS AND POSSESSING UNAUTHORIZED PASSWORD FILES

 

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

 U.S. Attorney Donald K. Stern announced today that a criminal Information was filed in U.S. District Court charging ALIBRIS, which is headquartered in Emeryville, California, with ten counts of unlawful interception of electronic mail messages ("e-mail") and one count of unauthorized possession of passwords with intent to defraud.

 The Information alleges that ALIBRIS's corporate predecessor, INTERLOC, INC. ("INTERLOC"), was an on-line bookseller, and also operated a business called Valinet, which provided Internet service in the Greenfield, Massachusetts 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 Information alleges that the purpose of the interception was, in part, to gain competitive commercial advantage for ALIBRIS/INTERLOC's own online book-selling business by compiling a database of dealers' purchases and to analyze 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.

 U.S. Attorney Stern stated: "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 cooperated fully in the government's investigation. No confidential customer financial information was obtained or misused.

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

 This case was investigated by the Federal Bureau of Investigation and the Massachusetts State Police. The case is being prosecuted by Jeanne M. Kempthorne, Chief of Stern's Public Corruption and Special Prosecutions Unit.

Press Contact: Samantha Martin, (617) 748-3139
 

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