Parasites and Pepsi challenges

Can an online business give itself an unfair competitive advantage with clever programming?

That’s a question SideStep’s rivals are asking themselves after a subroutine called “The Pepsi Challenge” was discovered earlier this week. SideStep is a travel search application that downloads to a Windows PC using Microsoft Internet Explorer version 4 and above. The program integrates into the browser and launches after an icon on the browser’s menu bar is pushed, searching close to 100 travel suppliers for low airfares, rental car prices and hotel room rates.

Problem is, that’s not the only time it turns itself on. One undisclosed component, that company programmers have called “The Pepsi Challenge,” activates SideStep whenever any fare search is conducted. The application harvests a user’s search criteria and then runs a SideStep query simultaneously so results can be compared side-by-side. It’s possible to turn the feature off. However, some have complained that the program resets itself in the “on” position when the browser is restarted.

“The way SideStep works is particularly parasitic,” says Suzi LeVine, Expedia’s marketing director. “It’s a living, breathing entity that is running in the background, reading the URLs you’re searching. Who knows what else it’s doing?”

SideStep’s competitors are equally incensed.

“It’s outrageous,” says Jeff Hodes, a vice president for corporate relations at FareChase.com. “I’m shocked. I’m talking to my engineers about how to block SideStep from doing this.”

Mark Guyer, the chief executive of search site Airlineguides.com, says his developers were tempted to go the path of SideStep when they scripted their fare search engine. But he says privacy and fairness concerns kept them from doing so.

“SideStep,” he adds, “is a virus.”

Nonsense, says SideStep’s vice president of marketing, Phil Carpenter. “To be candid, I think this is a non-issue.”

Why? For starters, Carpenter claims that customers not only asked for the “Pepsi Challenge,” but that they also preferred it to download in the “on” position. “People like to see their fare search in context,” he says. What’s more, SideStep is an application that users choose to install on their PC; it’s not something they’re forced to do.

Carpenter also brushes aside concerns about privacy. “We’re not searching another Web site. The information is being passed between the client and us. There’s no third party involved,” he says.

SideStep is quick to point out that its accusers aren’t completely innocent. Suppliers have complained that these kinds of search engines essentially steal fares off their sites, adding more lookers than bookers to their pages. The fledgling dot-coms also stand accused of using deceptive coding tactics – including one memorable episode last year in which Qixo reportedly hid its queries behind an IP address belonging to the Redondo Beach, Calif., School District in an effort to prevent suppliers from blocking its searches.

Still, there are legitimate issues that SideStep’s critics have brought up. The company’s terms of service agreement makes no mention of the “Pepsi Challenge,” nor does its privacy policy. There’s no warning that it will be on your browser in the “always-on” position. There are no explicit directions on how to disable it. (In response to my queries, SideStep agreed to modify language in its service agreement regarding the program.)

The discovery of SideStep’s surreptitious subroutine raises other questions about privacy and competition that are likely to have repercussions beyond the travel industry. They include:

Whose customers are they, anyway? SideStep’s rivals believe “The Pepsi Challenge” steals clients from them; SideStep thinks travelers are entitled to a comparison. But when a fare search is initiated from one site, are users actually requesting two simultaneous queries? Answer: if a side-by-side comparison was specifically requested, then yes. Otherwise, the customer should only see results from the site that’s being queried. Anything beyond that might be considered unsporting.

What are we inviting onto our PC? Whether SideStep is a virus or just a clever program is a distinction few end-users bother to make. Nonetheless, revelations about the “Pepsi Challenge” are sure to generate questions about plug-ins and applets that are being downloaded from other sites – including yours. What kind of disclosure do you offer about the applications on your site? What reassurances do you give customers about your services? What are you not telling them?

What if this really is a “non-issue”? If, as Carpenter suggests, customers aren’t worried about the code, then what does this mean for e-commerce in general? More comparison-shopping programs could emerge that help users buy other goods. They could trigger a program “war” with one applet fighting for dominance on a Web browser. That, in turn, could lead to browser pandemonium, where none of us is really in control of our browser because it is constantly running a series of automated tasks intended to turn us into customers. And down that road, as one of my former journalism professors used to say, lies madness.

SideStep should have left well enough alone. It had already set itself apart from its competitors as the most effective search engine of its kind. The company only tightened its terms of service agreement after it got caught. But it still refuses to load its “Pepsi” subroutine in the “off” position.

That’s something it should seriously consider doing.

Christopher Elliott is the author of Scammed: How to Save Your Money and Find Better Service in a World of Schemes, Swindles, and Shady Deals. Critics have called it “eye-opening” and “inspiring” — it’ll “grab your attention and won’t let go.” Order your copy now on Amazon, Barnes & Noble or iTunes.

Be the first to comment