Attempting to apply old-school approaches and invoke protectionist practices in today's ever-changing business environment is a recipe for disaster.
While information technology introduces opportunities to achieve enormous efficiency and cost gains, it also creates a level of disruption that would have been unthinkable only a decade ago.
Barcode readers built into smartphones are a perfect example. They, along with easily available information about products and pricing via the Internet, have introduced showrooming—which has fundamentally reshaped brick-and-mortar retailing by making it easy for shoppers to look at a product in a store and then buy it from a competitor online.
We are only beginning to understand what's possible using more sophisticated devices, big data and algorithms. The latest example? A 22-year-old computer whiz named Aktarer Zaman recently built a Website called Skiplagged, which ferrets out rock-bottom airfares by assembling data on so-called hidden city flights, which involve a stopover.
Apparently, consumers love the site, but United Airlines and Orbitz frowned upon it. They sued Zaman and contended that he represents unfair competition, even though he earns no money from the site.
Besides the utter absurdity of claiming that a Website that uses publicly available data and doesn't actually book flights is illegal, there's the Las Vegas-style hypocrisy of attempting to rig the odds in the house's favor. Except this isn't gambling.
I'm guessing that United and Orbitz thought Zaman would cave, but he is fighting the lawsuit, and, ironically, publicity over the Internet and the use of GoFundMe (a crowdsourcing funding site) has so far netted him a legal defense fund of nearly $40,000.
CIOs and other executives had better take note. Attempting to apply old-school approaches and invoke protectionist practices in today's ever-changing business environment is a recipe for disaster. I'm betting that United and Orbitz will ultimately back out, settle or, if it gets to court, lose.
Their arrogance and heavy handedness—using the legal system to squash any perceived threat—is somewhat predictable, yet pathetic. Airlines already threaten to void tickets and frequent flyer miles for travelers who use a hidden city flight.
There are a few takeaways from all of this. First, businesses must learn to live with sites such as Skiplagged. A free economy isn't free from some and not all.
Second, instead of draining money and resources attempting to block new systems and technologies, it's smarter to focus on innovation. Thanks to all the publicity, I'm sure that a lot more people know about Skiplagged and hidden city flights now than they did before the lawsuit.
Finally, the Internet, social media, crowdfunding and other tools ensure that if you pick the wrong fight, you may wind up shooting yourself in the foot.
Samuel Greengard, a contributing writer for CIO Insight, writes about business, technology and other topics. His forthcoming book, The Internet of Things (MIT Press), will be released in the spring of 2015.