VC-Backed Settles Spam Suit

New York AG Andrew Cuomo just announced a settlement with controversial social network, which he had previously accused of “deceptive e-mail marketing practices and invasion of privacy.”

The company will pay $500,000 in penalties and costs, and “adopt industry-leading measures regarding the access and use of its members’ personal information.”

Tagged CEO Greg Tseng had denied the charges back when the suit was originally filed, arguing that there had simply been confusion regarding an “invite your friends” feature that was disabled after numerous complaints (and bad press).

As you might remember, Connie had written a few posts on the spammy nature of Tagged prior to Cuomo’s suit:

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.

Connie also suggested that the company could become an embarassment to well-regarded investors like Mayfield Fund, Reid Hoffman (now with Greylock) and Peter Thiel (Founders Fund). None of those investors ever agreed to discuss the company with peHUB.

Here is a copy of Cuomo’s original complaint:

Tagged Complaint