Insider's View: How Grandstanding State Attorneys General Make Life Miserable For Law Abiding Tech Companies

from the it's-a-scam dept

For years, we’ve pointed out how various state attorneys general seem to focus much more on grandstanding against certain companies, rather than actually helping in certain situations. What was really amazing was the incredibly clear pattern every time it happened. It would involve an attorney general who was running for higher office, going to the press and threatening some company, even if there was no legal basis whatsoever for the threat. It’s as if every AG running for higher office has taken a page out of the playbook of Eliot Spitzer who used this strategy for years to get him headlines that took him right into the NY governor’s mansion (which, of course, he then left due to a different sort of headline a few years later…).

Among the current crop of AGs playing this game, there’s been Pennsylvania’s Tom Corbett (running for governor) who subpoenaed Twitter to uncover some anonymous critics. There’s South Carolina’s Henry McMaster (who tried to run for governor) threatening Craigslist management with criminal charges. But the two biggest users of this playbook have to be NY’s Andrew Cuomo (running for governor) — who has targeted social networks and ISPs for not censoring content — despite no legal obligation to do so, and Connecticut’s Richard Blumenthal (running for Senate) who has grandstanded with the best of them in going after tons of tech companies with almost no legal basis at all.

So, of course, I wasn’t surprised when I heard, back in February, that Kentucky’s Attorney General, Jack Conway, had started threatening local news/community site Topix. After all, Conway is running for the US Senate. Still, once Conway started the ball rolling, Blumenthal actually stepped in and led the ongoing gameplan. At issue? The company let people pay a small fee to “expedite” the process of reviewing comments for abuse. There is absolutely nothing illegal about this. A website has no legal obligation to monitor its user-generated content, and it doesn’t lose its safe harbor protections if it does monitor such content. So I was a bit surprised to see Topix settle the charges and change its policies.

Thankfully, Topix’s CEO Chris Tolles has written up a detailed post at TechCrunch, that is a nice behind the scenes account of how the whole thing went down, and what an incredible scam it is. It starts out, of course, with an attorney general (in this case Conway) going straight to the press, rather than to the company:

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.)

Tolles tried to be totally upfront and open with the various attorneys general who jumped onto the bandwagon (23 in all at the time), explaining to them exactly how Topix worked, how they reviewed comments, why they did things the way they did — knowing full well that nothing Topix did broke the law. How did that work out? Once again, the AGs went to the press and used the info he had given them (again, which showed how what they were doing was legal) to grandstand against Topix:

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.

Eventually, he realized this just wasn’t worth fighting over. The amount of revenue from the prioritized review was minimal, and just not worth the fight. So he gave in to the demands just to make them go away, giving the AGs (now up to 34 of them) another “settlement” headline — even though they never once claimed Topix broke the law:

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.

As Tolles notes, this has become such a successful practice for East Coast state AGs to attack California companies, that successful startups need to beware, because it’s going to happen a lot more often, and even when they’ve done nothing illegal, it’s often going to make sense for them to just settle. American politics at work.

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Companies: topix

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Comments on “Insider's View: How Grandstanding State Attorneys General Make Life Miserable For Law Abiding Tech Companies”

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Eugene (profile) says:

Re: SLAPP-plus

Even better if it can be sold as a viable vote-getting stunt. Imagine: attorney General A grandstands against random tech company. Attorney General B counters by grandstanding against Attorney General A using the new anti-grandstanding law. Grandstanding the grandstanding causes a paradox in space-time, and both lawyers collapse in on themselves. Problem solved!

Anonymous Coward says:

Re: Re:

One problem is that most people don’t vote, in many cities some politicians win by like 5K votes if that.

Also, I heard there is alleged voter fraud in the city of Bell. This probably only got attention because of the leakage of the insane pay rates of their politicians, otherwise they may have gotten away with it, who would notice? Who knows what other voter fraud is going on elsewhere or how many city of Bells there are. It doesn’t seem very difficult to just stuff the ballets with a few thousand more votes if there aren’t that many voters and claim there are a few thousand more voters than there really are.

For instance, have you ever seen the show It Takes a Thief. Often times these people, in broad daylight, park a van right in front of peoples houses and start taking big pictures and obvious valuables outside the houses and putting them in the vans and none of the neighbors ever seem to notice or call the cops. You know why? Even if they see it they probably don’t even think much of it, they think it’s just them starting to move or sell something or some other normal activity. These people often climb into peoples windows, in broad daylight, and no one notices to call the cops.

The point, and yes there maybe some differences, is that so much fraud (be it voter fraud, politicians getting overpaid, etc…) can occur and no one will notice. In many situations how will anyone notice?

But voter fraud or no voter fraud, many people are too ignorant and apathetic to even make a decent vote regardless and no one really knows about half the corruption that goes on behind the scenes to know who to vote for and who not to. Our mainstream media itself is very corrupt but that also often goes unnoticed.

Anonymous Coward says:

I’ll see them all in court. Love the notoriety. Love the scandal and WOW, if you win, imagine the press then! Buckling in to the AGs is like being setup by cops to do a crime you wouldn’t even do. Like being arrested for begging in Chicago at 10 years old. Trust the legal system. Hah. Justice is a joke. I have never gotten a fair deal from any court in this country which includes criminal, civil and especially family. So I say bring them on so I can bring them down.

Virginia Hoge says:


TechDirt, if you want to even think about redeeming yourself for the massive sell-out you are performing here, publish my comment.

Topix is corrupt and unethical. They are making piles of money off of abuse, libel is happening daily on Topix, millions of people’s lives are being harmed and ruined.

Give me a break! They are in urgent need of key moderation reform. I have been saying this for a long time and Topix is sick of hearing it.

They have stuck a pack of troll thugs onto me and my supporters on Topix, who are hacking into our computers, posting our personal information like addresses, hacking into our profiles, and saying this is all information and passwords handed over to them and sanctioned by Topix.

This thread is a must-follow:

“dem: kelly sent me all the passwords you use on your computer. think maybe i’ll make some purchases from artists den today.”

Virginia Hoge (user link) says:


Only the very toughest troll busters can comment on Topix and I have had the worst of them on my back for the solid year I have been on Topix. Now they are allowing open criminal activity to happen to my supporters and myself, like hacking our computers and passwords.

I have seen loads of libel and persecution on Topix. I have seen truck loads of racism and hatred. I have personal experience with the Topix almost non-existent moderation system and the near-impossibility of getting offensive comments and forums removed. Chris Tolles brags about the “difference” and “superior” ethics of his company – which means none – also openly declares war on newspapers:


“I guess its time for another crop of news products from journalists. Why is it that when these guys all go onto the field of battle “once more into the breach” style, they don’t understand which side of the Agincourt analogy they are on. They face superior weapons and a difference in culture and ethics. They are the French in this battle. They die.” – Chris Tolles, The Bad Guys Win

They “die”?

“Kelly Olive Hoge: I’m not worried, if money gets too tight, I can just transfer funds from your account to one of mine.”

Virginia Hoge says:

law abiding?

Here is how law abiding Topix is:

“Earl: I have guns maybe you should buy some too?”

“Earl: One shot one kill. I love my S&W Model 500.”

Its the Wild friggen’ West and Topix is putting out death threats to their critics.

Is this website going to be techDIRT? or techSUGAR, patsies to Topix’s criminal activity?

Yeebok (profile) says:

Do you rant much, Virginia ? Seems you have something to get off your chest. As a non US citizen I’ve never heard of, nor care about topix, however seeing your enthusiasm, perhaps you’re taking it all a little too seriously ?

Don’t take this the wrong way, but I don’t think having a go at the owners of a site on your first visit, in the last line of your first spate of comments is going to convince many people your hinges are secure. If you have the time to spend a year investigating organised crime on a website, you could maybe get out more ?

Virginia Hoge says:

to the topix troll and techdirt:


“Kelly Olive Hoge: I’m not worried, if money gets too tight, I can just transfer funds from your account to one of mine.

Not really.”

“Aaron Kelly Hoge: It doesn’t count as hacking when you work for the company and already have access to all the files, remember?”

“Aaron Kelly Hoge It’s amazing how much James Bond 007 movie stuff is now real and available to anyone! GOOGLE Earth to zoom in on someone’s apartment complex? AMAZING.

I had a ROUGH and LATE night a few nights ago… I picked up one of those Virgin Mobile cell phones, the small expensive one that has GPS in it, and I hid it somewhere on Ginny’s vehicle…

Let’s see how long until she figures out WHERE.”

It is dead-wrong.

Virginia Hoge (user link) says:


and no, I am not related to the troll, she is a name-stealer, a tactic of some of the worst Topix trolls.

I might as well add a troll named dem, who claims Chris Tolles is his uncle, is threatening his “uncle” is going to sue me:

“dem: my uncle said to tell you he is not allowed to correspond with you because of the order of protection he has against you, virginia. and when he is done suing you he will make a very public announcement.”

Topix has never stepped in to say if this troll is related to Chris Tolles or not, nor have they stopped the name-stealer troll from using the Topix company name as a username.

Concerned Citizen says:

From the article: “The company let people pay a small fee to “expedite” the process of reviewing comments for abuse.”

“Through this press release, which accused us of requiring payment to review abusive posts….” Chris Tolles

What the hell? But they did require and ask people who had been slandered and abused on their forums to pay $19.99 to have the comments reviewed and potentially removed. They didn’t “let” people pay a “small” fee nor was the accusation that they required that payment false.

Without the payment, Topix wasn’t going to review the comments at all . . . as they do today, now that the fee has been dispensed with.

They don’t review comments and they don’t remove them and people are being slandered, bullied and abused in every single forum, every single day.

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