Class-Action Against Tagged.com Points to Founder’s Past

“In executing a massive e-mail solicitation campaign to register new members,” Tagged didn’t tell registered users it would use their e-mail address books to “propagate yet more solicitation messages and harvest yet more e-mail addresses,” said the suit filed in U.S. District Court in San Francisco. The messages were “disguised” to appear as if coming directly from the return e-mail addresses, and they included false statements that the senders were “seeking to contact or share photographs with the recipients.”

The lead plaintiffs are California artist Miriam Slater and her friend Sara Golden. Slater received a Tagged e-mail that “appeared to have been sent by a friend” and filled out information that she thought would let her view the promised photos, but Tagged instead registered Slater as a new member. Golden received the same kind of invitation ostensibly from Slater and accidentally signed up for Tagged. Subject lines didn’t indicate the messages were “commercial in nature” or invite recipients to join Tagged, the complaint said. Message bodies contained invitations such as “[Your friend] sent you photos on Tagged / Want to see the photos?” with hyperlinked buttons marked “Yes” and “No.” Recipients were told they had to respond to the messages, but clicking either button led to a Tagged sign-up page, the complaint said.

Slater and Golden compared the process of registering to a “computer virus whereby each infected computer (or user, in this case) necessarily, unknowingly and accidentally infects many other computers (or users).” Tagged tells users to input their e-mail accounts and passwords to “match you up with your friend” but sends invitations to a person’s entire address book, which isn’t clear from Tagged’s privacy terms, stating that members consent to their personal information being used to send “commercial e-mail.” Tagged uses “non- standard, inconspicuous notices when offering users the choice to skip providing information,” the complaint said. It noted CEO Tseng’s admission on the Tagged blog, following Cuomo’s stated intent to sue, that it was “too easy for people to … unintentionally invite all their contacts.”

Tseng has a history of deceptive marketing, the complaint said. JumpStart Technologies drew the largest CAN- SPAM penalty to date when Tseng was CEO, paying $900,000 under an FTC consent decree in the same San Francisco federal court (WID March 24/06 p7). The FTC said the company’s “FreeFlixTix” promotion -- offering free movie tickets to users who gave the e-mail addresses of five friends and sending promotional e-mail ostensibly from FreeFlixTix users -- was deceptive. But JumpStart also failed to quickly honor opt-out requests and some users were “deceived” into signing up for advertising partners’ services, including credit cards, the FTC had said.

The consent decree prohibited Tseng and JumpStart owner Johann Schleier-Smith -- now Tagged chief technology officer, and also a defendant in the Slater case -- from “misrepresenting” the source or content of an e-mail message, even “by implication,” the Slater complaint said. Tseng and Schleier-Smith soon after expropriated the JumpStart business model for Tagged, which they had founded in 2004, the complaint said.

Tagged “intentionally accessed without authorization” Internet users’ e-mail address books, “obtaining and altering proprietary data,” and caused users to spend “personal and business time investigating and rectifying” Tagged’s e-mails to users’ contacts. The complaint said Tagged violated the Stored Communications Act, Computer Fraud and Abuse Act, and California’s computer crime, unfair competition and consumer legal-remedies laws. It asked the court for preliminary and permanent injunctions against Tagged sending information about users for advertising purposes without “fair, clear and conspicuous notice” and the opportunity to decline such transmission. The complaint also asks for Tagged to set up a trust to disgorge all profits from “unlawful conduct.”