Topix CEO: Blumenthal 'running point' on technology attack

John O'Brien Aug. 23, 2010, 2:00pm


PALO ALTO, Calif. (Legal Newsline) - The CEO of says he learned the new developments in the investigation of his company through press releases issued by state attorneys general.

Topix was recently the subject of the inquiries of two state AGs seeking higher offices -- Connecticut's Richard Blumenthal and Kentucky's Jack Conway, both of whom are running for U.S. Senate. Earlier this month, Topix agreed to make policy changes regarding a fee it charged for expedient policing of posts made on the site.

CEO Chris Tolles said he didn't know about the probe until a member of the media contacted him. He wrote on TechCrunch:

"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 U.S. Mail and post-marked five days after this incident)."

Tolles wrote that he talked with a group of assistant attorneys general and educated them about his company's comment-approving practices. Tolles says 3 million to 4 million comments are posted on the site each month.

"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 percent of our staff on these issues, what was the response (you could probably see this one coming)," Tolles wrote.

"That's right. Another press release. This time from 23 states' attorneys general."

Tolles says the release put a negative spin on the information he had given the staff of the attorneys general. It was released in May.

Tolles added that Blumenthal is "running point" for a group of attorneys general that wants to take on technology companies.

"Topix earns a dime off of other people's devastation - making money from mistreatment when victims pay up to protect themselves or their children from online bullying and abuse," Blumenthal said in the release.

Eventually, Topix settled with 33 state attorneys general. Under terms of the agreement, Topix will eliminate its fee for a fast review of inappropriate or abusive posts and will work to improve consumer protections.

"After the second smackdown by press release, I concluded that it wasn't worth trying to stand up for the $20,000 a month in prioritized reviews we were doing, and that it simply wasn't worth the cost of getting in deeper," Tolles wrote.

"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."

Tolles said he felt he had the right to offer an expedited review system, but since it angered users enough to complain then it might be better to remove it.

"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)," Tolles wrote.

"And I'm glad (Andrew) Cuomo, the N.Y. AG took on the banks last year and made them cash out auction rate securities for businesses like ours."

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