Earlier this year Topix CEO Chris Tolles got the call no one wants to get – that they were under investigation by a government entity. Two attorneys general, one of which was deep into his senate run, were leveling accusations of abuse at Topix. The company eventually settled with thirty three AGs, plus two U.S. territories. We asked Chris to tell us about his experience dealing with these people. Too often, we’ve found, the office of attorney general is used for little more than a way to advance one’s political career.
“Would you like to comment on the accusations being made about your site by the Attorney General?” Excuse me? What is it about the week after my birthday? Two years ago, Google launched a local news product the day after my birthday and this year, it was Cheryl Truman of the Lexington KY Herald-Leader calling me with this little gem.
Evidently, this is how a California company finds out that the Attorneys General of Kentucky and Connecticut have “significant concerns” about how your company does business. They have a press conference. When I told Cheryl I had no idea what she was talking about, she kindly forwarded me the press release from Jack Conway, the Attorney General of Kentucky.
Through this press release, which accused us of requiring payment to review abusive posts, I discovered that the Kentucky Attorney General had allegedly sent a letter asking me to provide information regarding our terms of service and policies around payment for expediting reviews. (The letter to which the press release referred was put in the US Mail and post marked five days after this incident.)
Topix is the largest local forum site in the US and deal with 3-4 million comments a month, and I was going to find out a little more than I bargained for with regard to the politics involved in focusing on local audiences.
This initial dynamic – being communicated at via excoriatory press release proved to be a consistent theme going forward. I suppose I should take it as a testament to our success that taking on Topix would be perceived as an important public policy goal for two candidates for the US Senate. After waiting the 10 or so days to actually get the letter, we set up a call with our lawyers and a bevy of assistant attorneys general. After my lawyers reconfirmed that we weren’t being accused of breaking any specific laws, I decided to take a pretty open stance with these guys and give them the background on what we did, and how we did it, figuring that if they knew what we were doing, and in particular, if they knew that the paid expedition of reviews was only about 1% of all of our feedback, that we would be able to clear this up pretty easily. (I was wrong about this).
The call with these guys was actually pretty cordial. We walked them through how we ran feedback at Topix, that how in January 2010, we posted 3.6M comments, had our Artificial Intelligence systems remove 390k worth before they were ever even put up, and how we had over 28k feedback emails and 210k user flags, resulting in over 45k posts being removed from the system. When we went through the various issues with them, we ended up coming to what I thought was a set of offers to resolve the issues at hand. The folks on the phone indicated that these were good steps, and that they would circle back with their respective Attorneys’ General and get back to us.
So, after opening the kimono and giving these guys a whole lot of info on how we ran things, how big we were and that we dedicated 20% of our staff on these issues, what was the response. (You could probably see this one coming.)
That’s right. Another press release. This time from 23 states’ Attorney’s General.
This pile-on took much of what we had told them, and turned it against us. We had mentioned that we required three separate people to flag something before we would take action (mainly to prevent individuals from easily spiking things that they didn’t like). That was called out as a particular sin to be cleansed from our site. They also asked us to drop the priority review program in its entirety, drop the time it takes us to review posts from 7 days to 3 and “immediately revamp our AI technology to block more violative posts” amongst other things.
So, more calls from local newspaper reporters who had been sent the press release, this time from a few more states. And the AP.
Somewhere around this time, I reached out to my friend Chris Kelly, who was the former chief privacy officer for Facebook, and whose wife used to work in the office of the Kentucky Attorney General. He gave me some good advice on the issue, and since he was pretty busy for running for the California Attorney General position at the time, referred me to talk to a former Attorney General from Indiana, Jeff Modisett who is now in private practice. While our law firm, PietraGallo, out of Pittsburgh, had been a great job with coordination and laying out our options, I wanted to make sure that if things got much worse, that I had an escalation path with someone who knew these guys personally. Perhaps the most useful outcome of these conversations was that I discovered the form factor of resolution for issues like this was a so called “joint statement”, such as those between MySpace and Craigslist and a myriad of Attorneys’ General.
After the second smackdown by press release, I concluded that it wasn’t worth trying to stand up for the $20k a month in prioritized reviews we were doing, and that it simply wasn’t worth the cost of getting in deeper. So, armed with the understanding that we should be seeking out a “joint statement” we pretty much walked down the list with the Assistant AG from Kentucky, Todd Leatherman, and tried to find a way to say “yes” in as painless a way as possible. There were also some points they made which were probably good for us to implement (like giving law enforcement a more direct way of reaching us), and this time I made it clear that I wouldn’t be officially answering anything unless they agreed to communicate with us first before holding a press conference to highlight any remaining disagreements.
Our joint statement was issued on August 9th, and reported in 238 different articles including a post on TechCrunch. All hail our government in action.
Going through this was a tremendous pain in the ass, and I would recommend avoiding it if you can. However, if you run a site that people actually use, chances are something like this might happen to you. So, here are my thoughts and recommendations.
This is going to happen more – The States’ Attorneys General are the place that complaints about your company will probably end up. This is especially true if you host a social or community based site where people can post things that others may dislike. And, there’s no downside to attacking a company based in California for these guys (MyScape, Facebook, Craigslist have all been targets in the past couple of years). Taking complaints from your citizenry and turning them into political capital is simply too good an opportunity for these guys to pass up.
Nobody expects the Spanish Inquisition – Unlike most other people in business who will attempt to reach out to you to get what they want, and use the threat of going public as a tool, our experience is that the offices of the Attorneys’ General seem to be most happy communicating via press conference, without any sort of preliminaries. This is primarily a political exercise, and you’re dealing with people who are very empowered to make life difficult for you.
Pissed off people, not illegality, is the issue to watch – At no time during this process were we accused of breaking any laws. The Attorneys General have interpreted their mandate of consumer protections very broadly, and if a lot of people *think* you are doing something wrong, you are likely to be headed for a problem. The biggest issue for us is that we put a button that had non deterministic outcomes (three people needed to flag a post) next to an option that wanted you to pay $19.99. The fact that we told people in big bold letters that this was paying for making your free review faster did not discourage people from concluding that we had disabled the free feedback and that we were charging to remove posts, rather than letting people jump the queue.
Take this seriously and lawyer up– especially If you find yourself in a place where there is significant downside (instead a small feature, you need to shut down, or there is a massive monetary amount at play), you really want to find some folks who have worked with these guys, and potentially have been one of these guys before. We have great lawyers, but you really need to keep in mind that an AG essentially is a state run law firm employing hundreds of people. I essentially caved and it still took six months and more money than I care to think about.
You’re not a wimp, you’re a pragmatist – I never thought I would be putting my name on a joint statement with 34 states attorneys’ general. It turns out that they’ve organized themselves into a sort of zone offense strategy and the Richard Blumenfeld AG from Connecticut, essentially is running point for other AG’s who want to take on technology companies. Things quickly escalate, and it’s unlikely to be good for business to be in a protracted fight with the government. I will point out that Microsoft and Intel were both accused of all sorts of monopolistic business practices in the 90’s and Intel mostly worked with the government and Microsoft mostly didn’t. Seems to me that Intel’s approach worked better.
It takes longer than you think – Especially when these guys start to pile on, it takes them a while to discuss what they’re going to do with you. For us, he first press release came out on Feb 11, and the joint statement on August 9th. The ball is often in their court, and there’s no much you can do in the meantime.
Sometimes they’re right – Despite the rather venal and self serving communications strategies, the issues that the Attorneys’ General take on usually have some set of consumers who have brought it up in the first place. While I think I have every right to offer an expedited review system, it pissed off enough people to enter the issue intot he realm of the political, and it’s probably better for us to take it off the site. Likewise, it was probably good for us to give law enforcement a more straightforward way to communicate with us (people like to post about crimes they commit or see). (And I’m glad Cuomo, the NY AG took on the banks last year and made them cash out auction rate securities for businesses like ours.)
I think I’m going to take the week after my birthday off next year.
Topix is a news community that connects people to the information and discussions that matter to them in every U.S. town and city. The site links news from 74,000 sources to more than 450,000 user-generated forums. Topix also works with some of the nation’s major media companies to grow and engage their online audiences through forums and RSS feeds.
Chris Tolles is the CEO and co-founder of Topix. Prior to Topix, Chris co-founded and was the VP of Marketing at Spoke Software, an enterprise social networking startup. Chris was one of the co-founders of NewHoo, which evolved into the Open Directory Project at dmoz.org afgter being acquired by Netscape. The Open Directory is the largest human edited directory of sites on the web. After getting acquired by Netscape, Chris ran marketing for Netscape Search and AOL...