A federal judge has given Chinese search-engine giant Baidu the green light to proceed with its negligence lawsuit against domain registrar Register.com in a court decision that said an error that wreaked havoc on the Chinese site smacked of intentional wrongdoing.
The ruling came after Register.com argued in March that it couldn't be sued for the ham-fisted blunder because its MSA, or master services agreement, barred most claims for employee screw-ups unless they involved gross negligence. The suit arose out of a January attack in which a Register.com employee turned over an account used to control Baidu's domain servers to a member of “the Iranian Cyber Army” even though the person presented incorrect credentials not once, but twice.
As a result, Baidu — the world's number-three search engine and the biggest in China — lost control of the baidu.com domain name for more than five hours. Register.com employees refused assistance when legitimate Baidu representatives appealed for help by phone and online chat, and didn't begin to address the problem until two hours after first being told of the snafu.
“I hold that Baidu has alleged sufficient facts in its complaint to give rise to a plausible claim of gross negligence or recklessness,” wrote US Judge Denny Chin, sitting by designation in the Southern District of New York. “If these facts are proven they would provide a sufficient basis for a jury to find that Register acted in a grossly negligent or reckless manner, in which event the limitation of liability clause in the MSA would be ineffective.”
Chin cited four considerations that led him to that conclusion. First, the Register.com employee agreed to change the email account associated with Baidu's account even though the intruder gave an incorrect response to a security question. Second, in a subsequent conversation, the employee didn't notice that intruder gave an invalid security code. Third, when the intruder asked that the email account be changed to email@example.com, the rep failed to notice it was hosted by Baidu's arch rival. And last, the rep provided the intruder with Baidu's user name, allowing the DNS-records hijack to proceed.
“If these allegations are proven, then Register failed to follow its own security protocols and essentially handed over control of Baidu's account to an unauthorized intruder, who engaged in cyber vandalism,” Chin wrote. “On these facts, a jury surely could find that Register acted in a grossly negligent or reckless manner.”
The amount of resources that Register.com is pouring into the defense of what almost everyone would agree is a massive cock-up is breathtaking. Here's hoping the domain registrar is also devoting as much energy to the protection of its customers. ®