We continue to view third-party web scrapers as an attractive investment despite content platforms’ recent push to pursue anti-circumvention claims as a new litigation pathway. These claims face significant hurdles in court, since platforms hosting user-generated content typically do not own copyright to it. Nonetheless, a successful claim would carry severe consequences, making Google v. SerpAPI and Reddit v. SerpAPI key cases to watch.
- Since the 2019 hiQ Labs v. LinkedIn decision established that scraping publicly available data largely does not violate federal law, the legal environment around third-party data scrapers has been favorable. However, platforms are increasingly shifting to Digital Millennium Copyright Act (DMCA) Section 1201 claims, framing scraping as circumvention of bot detection and protection measures, and thus stripping scrapers of the fair-use defenses available under standard copyright law.
- Platforms face an uphill battle in winning on DMCA Section 1201 claims against data scrapers, as content platforms generally do not own the copyright to the user content in question.
- However, a successful claim would carry severe consequences. At the scale third-party data scrapers operate, statutory damages of up to $2,500 per act of circumvention could be value-destructive, while injunctive relief could block defendants’ access to platform data. Investors should monitor Google v. SerpAPI and Reddit v. SerpAPI, where judges are deliberating on motions to dismiss.
Background
The regulatory environment around web scraping has been largely favorable since hiQ Labs v. LinkedIn, where the US Court of Appeals for the Ninth Circuit affirmed a lower court’s decision finding that collecting publicly available data does not violate the Computer Fraud and Abuse Act (CFAA). While the court later found that hiQ violated LinkedIn’s User Agreement, giving platforms leverage in bringing state court terms of service (TOS) claims, scrapers have generally found effective defenses there too, including copyright preemption. Courts have been receptive to fair use arguments where the use is transformative, making copyright infringement claims difficult to rely upon for plaintiff platforms.
Given this background, Capstone continues to view third-party web scrapers as well-positioned to benefit from growing AI training demand. Licensing agreements between content platforms and AI developers signal that AI companies place significant value on data access, creating tailwinds for scrapers with legally defensible collection methods.
DMCA Risk
Platforms are increasingly using DMCA Section 1201 of the Copyright Act, a largely untested legal theory that combines the unauthorized access angle of TOS claims with federal statutory power, against data scrapers after seeing mixed results in copyright and TOS claims. Large content holder Reddit Inc., for example, sued Anthropic for illegal scraping under state TOS claims in 2024, but shifted its litigation strategy to federal DMCA claims in its October 2025 scraping lawsuit against SerpAPI and others.
Capstone views DMCA Section 1201 claims as a federal analogue to state TOS claims, which could prove to be more negatively impactful for data scrapers if courts accept the arguments. The DMCA, passed in 1998, makes it illegal to circumvent an access control or a security mechanism put in place to protect copyrighted works. Under the statute, a violation means “to descramble a scrambled work, to decrypt an encrypted work, or otherwise to avoid, remove, deactivate, or impair a technological measure, without the authority of the copyright owner.” To bring a DMCA claim, there does not need to be an actual infringement of copyright itself, theoretically giving platforms that lack standing, such as user-generated content platforms where they do not own their users’ content, the opportunity to pursue federal claims.
While Capstone believes plaintiffs face an uphill battle convincing courts that DMCA is a viable path to challenge data scraping in a post-hiQ world, investors interested in web scrapers and data providers should watch developments in DMCA cases as a key risk. DMCA Section 1201 violations carry statutory damages of $200 to $2,500 per act of circumvention with no requirement to prove actual harm. At the scale third-party data scrapers operate, potential exposure under these damages could be value-destructive on their own, on top of injunctive relief causing defendants to cease activity. In addition to direct litigation exposure, if platforms are able to use DMCA to lock down access to public search results, companies that depend on third-party search access may face meaningful disruption.
Active Litigation
Two active cases are testing the DMCA strategy: Google and Reddit have each sued SerpAPI (with Reddit suing others as well) under Section 1201. However, both plaintiffs facetwo major hurdles. First, neither platform owns the content in question and the defendants in both cases argue that the ownership problem barring user-generated content platforms from copyright claims also bars them from DMCA claims, even though the DMCA does not outright require a copyright infringement. Second, the technological measures at issue may not qualify as protected barriers under the statute. How courts resolve these two questions will likely determine whether DMCA will become a viable legal pathway against data scrapers.
Google v. SerpAPI
On December 19, 2025, Google filed a complaint against Texas-based market research and data provider SerpAPI in the US District Court for the Northern District of California, alleging it violated the DMCA by circumventing SearchGuard, Google’s bot-detection system, to scrape search results and resell them to third parties. Google claims that its search results contain copyrighted content, including licensed content, and that SerpAPI deployed “parasitic” bot networks to harvest it in violation of Section 1201. SerpAPI claimed in a press release that Google’s DMCA statutory damages could amount to $7.06 trillion, arguing that the figure proves that the allegations are not how “Congress intended the DMCA to be used.” Capstone believes Google faces an uphill battle in convincing Judge Yvonne Gonzalez Rogers to deny SerpAPI’s motion to dismiss.
SerpAPI filed a motion to dismiss on February 20, 2026, with four main arguments:
- Google does not own its content: The DMCA protects copyright holders. “Google is a website operator” and “not the copyright holder of the information it surfaces.”
- SearchGuard protects its advertising business: Google notes in its complaint that its bot-detection and protection measures exist to protect its advertising business, not the copyrighted work of its users.
- SerpAPI accesses public data: The DMCA protects private, “encrypted” content, not publicly visible web pages. SearchGuard allows ordinary users to access content.
- Google is the world’s largest scraper: Google built its business by indexing the public web “without distinguishing between copyrighted and non-copyrighted material.” Google’s complaint is “hurting itself.”
Reddit v. Perplexity, SerpAPI
Reddit filed a lawsuit on October 22, 2025, against SerpAPI, OxyLabs, AWMProxy, and PerplexityAI, alleging the defendants bypassed its safeguards to collect Reddit content at scale without a license. Similar to its state court case against Anthropic, Reddit’s complaint centers on its User Agreement and access controls rather than copyright ownership.
Reddit does not allege that SerpAPI ever visited reddit.com directly, like it alleges against Anthropic. Rather, Reddit argues that SerpAPI accessed Google search data that contained Reddit content without authorization. SerpAPI’s motion to dismiss echoes many of its arguments in the Google case, including that Reddit does not own its users’ content, but adds that it also does not control the technical measures at issue (Google’s search results). Unlike Google, however, Reddit cannot be accused of hypocrisy as a fellow scraper, allowing the court to focus on the core legal questions without contemplating Google’s own scraping and antitrust history.
What’s Next
Judge Gonzalez Rogers will hold a motion to dismiss hearing in Google v. SerpAPI on May 19, 2026. Oral arguments for SerpAPI’s motion to dismiss in Reddit v. SerpAPI are scheduled for June 30, 2026, before US District Court for the Southern District of New York Judge Paul Engelmayer.
Read more from Capstone’s TMT team:
The US’ Unprecedented Threat to Foreign Semiconductor Firms
The End of Cheap AI: Why AI’s Cost Reckoning has Begun
The Growing Compliance Pressure Facing Data Brokers
