[Seocho-dong Legal Story] The Story Behind ‘Yanolja’ Losing 1 Billion Won to ‘Yogi-otte’ for Stealing Information

[Asia Economy Reporter Choi Seok-jin, Legal Affairs Specialist] Around the second half of 2016, an unusual pattern was detected on the server of Yanolja, the leading domestic accommodation application (app). A large volume of traffic occurred that was difficult to interpret as customer access for booking accommodations. Yanolja, analyzing the cause, detected mass call signals and blocked the corresponding IP addresses. However, the same issue recurred shortly thereafter. Ultimately, Yanolja requested an investigation from law enforcement agencies.

During the investigation, a surprising fact was revealed. The person accessing Yanolja’s server using the problematic IP was none other than employees of its competitor, Yeo-gi-o-ddae.

According to the court ruling, since 2015, Yeo-gi-o-ddae had been accessing Yanolja’s mobile app and PC website to check lists of affiliated accommodations, address information, price details, and shared this internally for business use. Initially, sales strategy staff member A manually compiled the information one by one, but in January 2016, at the request of the sales strategy team leader, an automated data collection program (crawling) was developed to collect information more conveniently from Yanolja.

Yeo-gi-o-ddae used this program to access Yanolja’s mobile server and massively copied information such as the names of affiliated accommodations, addresses, room names, rates, discount amounts, check-in and check-out dates and times, then utilized this data for their own sales activities. They also checked the sales volume of event products posted by Yanolja, such as the 'Lowest Price Guarantee,' and launched similar service products. When Yanolja blocked access by IP address, they updated the program so that the IP address would automatically change by turning the server power off and on. The illegally obtained information was even reported to the company’s CEO at the time.

Upon discovering these facts, Yanolja filed a lawsuit in February 2018 seeking an injunction against rights infringement and claiming 2 billion KRW in damages.

The Seoul Central District Court Civil Division 63-2 (Presiding Judges Park Tae-il, Lee Min-su, Lee Tae-woong) ruled on the 19th that Yeo-gi-o-ddae’s actions constituted unfair competition under the Unfair Competition Prevention Act, ordering that all replication, distribution, and storage of Yanolja’s affiliated accommodation information be prohibited. The court found that Yeo-gi-o-ddae collected and used Yanolja’s information for business purposes over approximately nine months from January to October 2016.

While Yeo-gi-o-ddae’s illegal acts were acknowledged, the issue was the calculation of damages.

In court, Yanolja argued that damages should be calculated based on the profits Yeo-gi-o-ddae earned during the problematic period. They also claimed that about 30% of the accommodation fee paid as a database usage fee when accommodation contracts were concluded should be considered as damages.

On the other hand, Yeo-gi-o-ddae argued that Yanolja’s affiliated accommodation information had little value and that the method of data collection using crawling programs was very common and thus constituted a legitimate act. They further claimed that if the value of the affiliated accommodation information were to be assessed, it would be approximately 174,000 KRW, the price of the 'National Accommodation Industry 2016' CD published by Korea Contents Media.

However, the court stated, "This case is one where it is extremely difficult to prove the facts necessary to calculate the amount of damages," but considering the investment costs Yanolja incurred to collect such information, the compensation amount was set at 1 billion KRW. In particular, the court took into account that Yanolja spent hundreds of millions of KRW annually on operating expenses and tens of millions on labor costs. It also reflected the fact that Yanolja employees visited each accommodation affiliated with them five to ten times a month to collect information directly.

Meanwhile, regarding this case, the former CEO and employees of Yeo-gi-o-ddae, who were indicted on charges including violation of the Information and Communications Network Act, were found guilty in the first trial, but the verdict was overturned in the second trial with a not guilty ruling on the grounds that "Yanolja did not appear to have kept the information confidential," and the final judgment is currently pending at the Supreme Court.

This content was produced with the assistance of AI translation services.