Yikes, Andrew Cuomo Suing Tagged.com

New York Attorney General Andrew Cuomo announced this afternoon that his office plans to sue controversial social networking startup Tagged for “deceptive e-mail marketing practices and invasion of privacy.”

I asked Tagged CEO Greg Tseng for comment; he just sent me the following statement: “Today’s announcement by New York Attorney General Cuomo is disheartening. Identify theft and invasion of privacy are very serious allegations and it is not accurate to portray Tagged, or any other social network, in this regard.

“As a social networking company, our membership is built on word of mouth.  Friends invite their friends to join — this has been standard practice among all social networking sites for over five years. When our company tested a new registration process, we discovered that our ‘invite your friends’ language was confusing. The registration drive generated some complaints and as a business that succeeds or fails based on word of mouth, we took every complaint very seriously. We immediately stopped using this registration process, before being contacted by the Attorney General’s office. In no instance did Tagged access a person’s personal address book without their consent and no emails were sent without the person giving us permission. We realize that some were confused and accidentally agreed to invite their friends. We are truly sorry for any inconvenience or frustration that these people experienced.”

As peHUB readers will know, I first wrote about Tagged in mid-June. Picking up on a report first published in the Ventura County Star, I noted that in the race to grow its user base, it had become a full-blown spam machine — one that could embarrass some of its investors, including LinkedIn CEO Reid Hoffman, former PayPal CEO Peter Thiel, and Mayfield Fund, which declined to talk with me about the company.

At the heart of the problem was the new registration process to which Tseng refers in his statement, one that manipulatively suggested that an email recipient check out an acquaintance’s photo by clicking a “yes” tab, according to recipients. Those targeted by the practice have said that once the tab was clicked, not only were they asked to register and fill out numerous fields, but even those who backed out the registration process say that Tagged extracted their address books, as well as sent the same invitation to their friends, acquaintances — everyone in their contact lists.

“This company stole the address books and identities of millions of people,” said Cuomo in today’s statement. “Consumers had their privacy invaded and were forced into the embarrassing position of having to apologize to all their e-mail contacts for Tagged’s unethical — and illegal — behavior. This very virulent form of spam is the online equivalent of breaking into a home, stealing address books, and sending phony mail to all of an individual’s personal contacts. We would never accept this behavior in the real world, and we cannot accept it online.”

The lawsuit will no doubt prove a huge embarrassment for Tseng and Tagged’s backers. Plenty of people will cheer the move, too. Cuomo’s office estimates that 60 million people were impacted by the controversial emails.

Still, it isn’t clear to me what Cuomo hopes to gain at this point aside from humiliating the company. Though his office is asking for a fine and for Tagged to stop its practices, Tagged — according to Tseng — already did that some time ago.

While Tseng didn’t exactly take responsibility for problem, telling me last month that the affected millions still needed to “click a button to invite all their contacts and all these pages are optional and have skip buttons,” he said that, “We want to make it easy for people to quickly build a network but we probably made it  too easy in this case.”

More relevant to Cuomo’s new case against Tagged, Tseng told me that “it didn’t matter whose fault it was.” As he reiterates in today’s statement, he says that Tagged “took quick and decisive action to shut down” the controversial registration process just days after it was launched. “Our whole company is built on the good will of our users,” he’s said. “If you like something, you’ll tell one person. If you dislike something, you’ll tell 10 people.”

If only he’d been so lucky.

Tagged Complaint