Monthly Archives: August 2013

Online Marketing: FTC Snooping Around Text Message Spammers

Mobile marketing Lawyer
The FTC is on the lookout for text message spammers.

Officials are on the lookout for spam text messaging schemes.

Recently, the Federal Trade Commission brought a complaint against a large mobile spam ring. According to reports, the defendants gathered information illegally and sold it to third-party marketing companies.

The case cites violations of the Federal Trade Commission Act and the Telemarketing Consumer Fraud and Abuse Prevention Act. It seeks preliminary and permanent injunctive relief.

Officials are also asking for equitable restitution on behalf of the victims.

FTC Opens Investigation Into Text Marketing Operations; Suspects Text Spam Fraud

The Federal Trade Commission’s investigation of the alleged activities dates back to June 2011, when it uncovered evidence of consumers being duped in order to receive “purportedly free merchandise, such as $1,000 gift cards to large retailers, and products such as an Apple iPad.”

The defendants allegedly used frowned upon mobile marketing techniques like:

  1. Unsolicited text messages – sent directly by the defendants and through intermediary third-parties, and
  2. Phony prize notices.

Sample spam text messages listed in the complaint included:

  • “You WON! Go to www.prizeconfirm.com to claim your $1000 Walmart Gift Card Now!”
  • “FREE MSG: you have been chosen to test & keep the new iPad for free only today!! Go to website and enter 2244 and your zip code to claim it now!”

Second Tier Websites Collected More Information Than Users OK’d

The FTC alleges that consumers who received the spam text messages were directed to websites that went further than “the initial promised free merchandise offer” and required consumers to “provide their [winning] code on the text message spam page.”

Then, before claiming the prize, individuals with “winning codes” were required to provide their zip code and email address. Even after entering their personal details, consumers were directed to another webpage that required input of more personal information.

The FTC alleges consumers were required to complete a total of thirteen offers before being able to claim the “free” merchandise.

The FTC alleges consumers were required to complete a total of thirteen offers before being able to claim the “free” merchandise.

The FTC also says that the defendants shared or sold the collected information with third-party marketing companies, which was subsequently used to make prerecorded voice messages for robo-calling purposes.

Contact Text Message Marketing Lawyer

If you work in the online marketing industry, and use automated calls or text messages as a quiver in your online marketing bow-bag, make sure you are operating on the right side of the law. Not sure? Contact Kelly Warner Law.

Online Marketers Brought Up On RICO Charges

When I say RICO, you think Goodfellas, right? Well, think again, because a law firm in Michigan, Seikaly & Stewart, decided to pursue a RICO lawsuit against an online marketing firm, The Rainmaker Institute, over so-called “worthless [online] marketing [plans] and fraudulent link-building [plans].”

Yep, gang, you read that correctly: professional SEOs are being brought up on racketeering charges for not meeting client expectations. Does the plaintiff in this case have a legitimate shot at winning? Is it possible to successfully sue an SEO company for poor results? We’ll deconstruct the lawsuit and examine the complex relationship of online marketing, search engine technology and the law.

Before We Sink Our Teeth Into The Case, Let’s Take A Quick Look At The Current State of SEO

The Uncertain World of Search Engine Optimization

As every professional SEO knows, the online marketing industry is as mercurial as a hormonal teenager. How impulsive? Imagine you’re an elementary school educator with 20 years’ experience. You are a rock star when it comes to teaching cursive writing, science 101 and early childhood socialization. Then one day, without warning, you arrive, in your classroom and find 20 M.I.T. educated scientists expecting you to wax poetic about the Quantum Field Theory.

Oh, and if you did not say something substantial and innovative, you’d get fired.

That is the environment in which online marketers deal, daily. Every so often, without warning, SEOs wake up to discover that Google changed its algorithms. Phones start ringing; angry customers demand to know why their websites no longer “show up in Google.” And simultaneously, industry forums alight with the single question on everybody’s fingertips: “did anybody else drop dramatically in the SERPs?”

Panda and Penguin: The Algorithm Updates That Changed The Web Forever

“Keywords” used to be the end-all, be-all of online marketing. But in time, algorithms grew up, and non-keyword-laden content started doing a bit better in the SERPs.

Then, between 2010 and 2012, Google unleashed two mother-load-algorithm updates called “Penguin” and “Panda.”

Panda and Penguin dramatically changed the online marketing landscape. In what seemed like the stroke of a wand, tried-and-true search engine optimization methods became obsolete. Online businesses suddenly stopped generating money. Elaborate linking schemes were rendered useless. It was, in a word, pandemonium.

When the change struck, online marketers worked feverishly to “figure out” the new Google. So-called link farms deteriorated like an untended city park in a time-lapse video; SEOs abandoned link mazes that had brought them SERP dominance just 12 hours earlier; consensus on the street was that lots of high-quality content and high-quality links were the preferred new SEO techniques.

The Panda/Penguin updates figure prominently in the Seikaly & Stewart RICO SEO lawsuit.

The Online Marketing RICO Lawsuit: Who is Suing Who?

So let us get down to the particulars this RICO SEO case.

About The Plaintiffs: Seikaly & Stewart

Seikaly & Stewart is a Michigan-based law firm. Unhappy with the Defendants’ online marketing program, Seikaly & Stewart filed a RICO test case in Federal court.

About the Defendants: The Rainmaker Institute, Stephan Fairley & Does

On its website, the Rainmaker Institute describes itself as “the nation’s largest law firm marketing provider.” Founded in 1999, TRI claims to use “cutting edge legal marketing strategies” that have helped “over 8,000 attorneys from hundreds of law firms generate more and more referrals and fill their practice.” TRI CEO Stephen Fairley began by lecturing at bar association gatherings and other speaking engagements. Over the years, he built TRI into a successful online marketing business by offering a host of products and services including books, CDs, live seminars, webinars, 2-day marketing “boot camps,” private in-house seminars and long-term marketing programs.

In 2011, Seikaly & Stewart hired The Rainmaker Institute as the firm’s online marketing agent.

Timeline and Facts of the Marketing Defamation Lawsuit

From July 22 to 23, 2011, one of the defendants from Seikaly & Stewart attended one of Fairley’s talks in Orlando, Florida. In the lawsuit, Seikaly & Stewart’s lawyers make note of the “generic” nature of the handouts his client received at the TRI seminar. Mentioning the marketing material used at the seminar may seem like a random point to highlight, as the vast majority of seminar handouts are generic; but, as you will soon see, the minor point does come in handy when arguing a far-fetched RICO charge.

After the two-day boot camp class, Seikaly & Stewart hired The Rainmaker Institute to develop and maintain the firm’s online marketing program. A representative from the law firm signed a $40,000 contract, and it was off to the digital races.

It was at this time that the Plaintiffs believe TRI hired a third-party contractor to create links to the firm’s websites.

After detailing how the two parties met at the Orlando seminar, and their decision to work together, the lawsuit glides over the year in which Seikaly & Stewart contracted TRI to conduct the firm’s online marketing efforts.

Did Seikaly & Stewart do better in the rankings? The suit does not say. Instead, the claim’s timeline picks up again when the initial contract ended. Curiously, it was at this time that Seikaly & Stewart doubled down and signed up for another 6 months of TRI’s service.

While it doesn’t specifically state so in the claim, it can be inferred from available information that post-Panda/Penguin updates, someone did an audit of Seikaly & Stewart’s website and noticed low-quality automated links, in addition to evidence of duplicate content. Consequently, the bell was rung at Seikaly & Stewart and the firm concluded that TRI must only be using “old school” online marketing techniques. As such, the Michigan attorneys moved to end their relationship with TRI. They also wanted a refund. TRI refused. So Seikaly & Stewart filed a RICO lawsuit.

Why RICO?

RICO stands for Racketeer Influenced and Corrupt Organizations. Passed in 1970, RICO was meant as a catchall for organized crime criminals. In brief, an individual associated with a criminal “enterprise” can be brought up on RICO charges if he or she commits two similar crimes in a 10-year period. What makes RICO different than other fraud charges is that the focus is on showing a “pattern of behavior” as opposed to a one-off act. If an individual is guilty of RICO charges, he or she can be fined up to $10,000 and 20-years in prison, per incident.

Presumably in an effort to highlight the “patterned behavior” necessary to win a racketeering claim, lawyers for the plaintiffs explained, “this case is not being brought for lack of success per se, the lack of success merely being evidence of fraud and damages to business or property.”

Another RICO requirement is the enterprise provision. It is not enough to bring a lone criminal up on RICO charges, he or she must be “backed” by a “coordinated enterprise” that manages long-term frauds. Lastly, a RICO case can only be successful if it is apparent that many people were affected by the “scheme” in question and the perpetrators knowingly sought to defraud.

Plaintiffs Arguments for Racketeering on the Part of The Rainmaker Institute, Online Marketers

As stated, in order to win a RICO case, the plaintiff must demonstrate a pattern of criminal activity within a 10-year period that affects multiple people or businesses. Lawyers for the claimants point to several facts, which, they argue, prove a pattern of RICO-esque behavior on the part of Fairley and the TRI enterprise.

Duplicate Content

Plaintiff Argument

The lawsuit mentions duplicate content that appears on websites associated with TRI clients. Why concentrate on duplicate content? According to the claim, “Defendant FAIRLEY through THE RAINMAKER INSTITUTE, engaged in an ongoing fraud upon the Victim Firms by selling the same supposedly “unique” blog content for posting on the firms’ web pages to several firms at the same time.”

Possible Defense

So-called “duplicate content” was not always a frowned upon online marketing technique. In this instance, it could be argued that the existence of duplicate content was a remnant from past efforts that was either overlooked or left alone for strategic purposes (i.e., the money spent eliminating all duplicate content would cost more than implementing new strategies).

Pattern of Corruption

Plaintiff Argument

Again, in order for a case to pass the RICO test, the plaintiffs must establish a “pattern of corruption.” In this case, the claimants argue that the defendants knowingly entered into a “RICO scheme” that “was based in part upon a series of fraudulent representations about the defendant’s experience and skills in the use of what is known as Search Engine Optimization (‘SEO’).” In other words, Stephen Fairley, et al knew that their SEO techniques were worthless but continued to market and sell their wares anyway – using “generic” materials mentioned earlier.

The plaintiffs push the pattern theory, stating, “The continued marketing by the Defendants of internet marketing services that the Defendants knew were worthless and knew were on misleading representations to unsuspecting clients, misled the clients into believing that the sheer number of links created would yield positive optimization results. This conduct represents a pattern of activity in violation of the RICO statutes.”

Possible Defense

The defense could attack this argument from several angles. First, it can be argued that just because artifacts of past SEO efforts still exist online does not mean that said artifacts are the only efforts associated with a given site. And, as explained earlier, it is not always possible to remove the remains of past SEO efforts – efforts that, at one time, worked.

And that is not all.

Websites that do follow Google’s guidelines sometimes perform well in Google SERPs. This fact raises a couple of key questions:

  1. Since guideline-breaking sites have been known to perform well in Google’s index, is it the responsibility of online marketers to follow Google’s published suggestions, or should SEOs weigh the field and use any techniques they think will work best for each client – even if that means using publicly frowned upon methods?
  2. Are online marketers beholden to Google’s guidelines? In the lawsuit, the Plaintiffs bring up the issue of “trade secrets” implying that TRI is fraudulently hiding behind them. Yet, Google is the poster-child for trade secret protection. As such, if search engines don’t give SEOs their algorithms, how can SEOs be chastised for not revealing their SEO plans? Moreover, how are SEOs supposed to follow guidelines if the art of online marketing is imprecise and in some ways subjective?
Made Use of “Wires”

Plaintiff Argument

By using the Internet, email and telephones to conduct their business, so the Plaintiffs argue, the Defendants violated 18 U.S.C. § 1341 and 18 U.S.C. § 1343. Specifically, “The defendants use the Internet, telephones and the U.S. Mail to promote their scheme [and] to negotiate contracts for their services and receive payment for them.”

Possible Defense

If the defense convincingly argues the other points, this one will be moot.

Issues To Consider In This RICO/SEO Lawsuit

Seikaly & Stewart v. The Rainmaker Institute is a fascinating case that begs us to consider a few Internet law legal questions.

Trade Secrets

These days, it all about information, baby! Trade secrets are a vital vein of the online marketing industry. As such, Seikaly & Stewart’s insinuation that TRI purposefully “[cloaked] their schemes in allegations of ‘trade secrets’ to avoid the balance of the scheme from coming to light” is (with all due respect) at worst, a reach, at best, naïve. The arguable nucleus of the search marketing world, Google, relies on trade secrets to maintain their spot as the #1 search engine. So it would be the height of hypocrisy for the courts to allow Google to protect the $%&^$ out of their trade secrets, but force SEO professionals to reveal theirs.

Hyperlinks & The Law

Inferring from passages in the lawsuit, the Plaintiffs probably hired a link expert to review the Seikaly & Stewart website, and it seems the expert came back with bad news: many of the links pointing to it were low-quality, automated links. Plus, according to the presumed link-person, fewer links existed than the Defendants promised. When the law firm approached TRI about the link situation, the latter supposedly “claimed that the process of building links, including where the links were to be found, was a trade secret.” As such, the Plaintiffs chose to conclude that TRI purposefully built bogus links as part of a premeditated plan to scam law firms.

OK. Let’s break this down.

First, as previously discussed, low-quality links may still point to a site as a result of past SEO efforts. Sometimes it’s impossible to remove unwanted links. Furthermore, since Google keeps changing the rules, it is debatable if low-quality links are wholly bad. Sure, Google recently introduced a new tool that allows webmasters to “disavow” any unwanted backlinks. But who is to say that TRI hasn’t already tried to disavow Seikaly & Stewart’s “bad links,” but Google hasn’t gotten around to updating their index? Moreover, who is to say that Google won’t change their mind about the negative value of link farms? After all, the search engine giant has reversed algorithm decisions before.

Second, the Plaintiffs argue that TRI delivered fewer links than promised. This raises the question: what tool did Seikaly & Stewart use to determine how many links were pointing to their site. For any SEO knows: different link report tools give different results.

Thirdly, trade secrets rule the online marketing industry. Not to be dramatic, but if TRI is forced to reveal their link strategy trade secrets, it could ultimately crush an entire segment of the online economy.

Essentially, the Plaintiff’s case can be summed up by one passage in the original filing: “The action is based on the fact that, at the time the Defendants were promoting this marketing scheme…they knew the techniques they proposed to use were in violation of the guidelines already well-established and published by Google.”

In this firm’s opinion, however, Seikaly & Stewart’s argument is weak. The mercurial nature of Google makes constant Google compliance near impossible, not to mention the near impossibility of immediately scrubbing the Internet of all past SEO efforts when a search engine decides to unveil a new algorithm.

But this case should serve as a warning to any and all online marketers and SEO professionals: Manage your clients’ expectations and don’t make empty promises. Also, make sure your client contract addresses the uncertain nature of search engine marketing.

We’ll be keeping an eye on this case, so check back often for updates. And if you ever need some legal help, get in touch.

Online Trade Libel Lawsuit: Broadspring v. Congoo

trade libel lawsuits
What happens if terrible reviews of your company land online? Worse yet, what happens if there is a sliver of truth to the terrible review. Is it still defamation?

When does healthy competition become defamation? A future ruling in a New York lawsuit may help better define the answer.

Broadspring, Inc and Congoo, LLC are “competitors in the online marketing and advertising business.” Fierce competitors, apparently, because in a lawsuit the former insists the latter is in the business of lie-spreading and client-poaching for personal profit. So, Broadspring is suing Congoo for defamation, unfair competition and tortious interference.

Is Broadspring operating outside the legal lines or is Congoo bending the truth? If Congoo’s knowledge crypt is lined with a zephyr of truth, is the company automatically off the hook, or is it still considered defamation? The answers to these questions are the main screws on which Broadspring, Inc. and Congoo, LLC turns.

But the facts of the case aren’t black and white.

Timeline and Facts of the Case

Let’s first take a look at the cold-hard facts of the case.

  • On March 2, 3013, a user named “Recruiterman” created an online marketing “lens” (a.k.a., web-page) on popular content site, Squidoo. Included on the lens were reviews of Internet advertising companies including Congoo subsidiaries Adblade and Adiant, in addition to Broadspring, Inc. While the lens author was complimentary of Adblade and Adiant, his admiration was absent in the Broadspring review. It read: “most of [Broadspring’s] distribution seems to come through media buys at DSPs and other exchanges. All of their display units take users to howlifeworks.com where they embed links to advertise pages for offers like ‘make your computer faster.’”  The review also indicated that Broadspring made it “tough to cancel credit card subscriptions.”
  • Sometime between March 2 and 7, 2013, the Squidoo lens in question was updated to read: “Downside: A simple Google search shows that Broadspring was formerly Mindset Interactive, a notorious spyware company. Mindset was eventually shut down by the FTC in 2005 and Sanford Wallace, their founder, known as “Spamford Wallace” was banned from online activity for 5 years. In Nov 2006, Broadspring’s shareholders then launched a notorious ringtones company, New Motion dba Atrinsic. Atrinsic has $17mm in financing (from various unknown investors), became public through a shady reverse-merger. They settled 3 years ago with 6 million users scammed: http://www. ftc. gov/o s/ caselist/04 2314 2/wallacefinal judgment. Pdf”
  • On March 7, 2013, a representative from Geology.com contacted Broadspring with news that the rock-focused website was cutting ties in whole because of an email, purportedly sent by Congoo, linking to the unflattering Squidoo lens. “I really like the looks of your ads, the controls of your website, and the pay was very good…but I am hesitant to run the ads after seeing the above,” explained the Geology.com representative.
  • On March 11, 2013, Squidoo “locked” the online marketing lens in question, but according to Broadspring, the damage was already done.
  • On March 12, 2013, Broadspring lawyers contacted Congoo’s counsel for reaction about the allegedly defamatory statements posted on Squidoo and via email. Broadspring’s attorneys requested that Congoo preserve and “ESI” (electronically stored information) connected with the situation. According to Broadspring, at this point, the Congoo lawyer said he needed a few days to review the situation. Broadspring asked once again about ESI, but did not get a response.
  • On March 18, 2013, another Broadspring client, Tech Media Network, sent an email regarding “concerning information” and referenced the FTC judgment against Wallace linked in the Squidoo article. It was also on this day that Broadspring lawyers expected a formal response from the Congoo attorneys about the ESI material. Much to the former’s chagrin, the Congoo brass simply sent back a vague, 10-word email, which didn’t address any of the aforementioned Broadspring concerns.
  •  It’s important to note that Broadspring says it has evidence linking the “defamatory” Squidoo updates to an IP address “very close” to Broadspring’s New Jersey office. As such, the plaintiffs are arguing a connection between Congoo and the updates in question.

Broadspring is adamant that Congoo’s accusations are as reliable as Herodotus. With the likes of Yahoo!, MSN and CNBC on their client roster, Broadspring questions Congoo’s characterization of its business as one that primarily deals with subscription offerors. Moreover, Broadspring insists it follows all applicable FTC regulations and doesn’t engage in any business “shadiness.” The plaintiff also highlights its toll-free contact phone numbers, displayed online, as evidence that they do not make it difficult for people to cancel subscriptions.

Also amongst Broadspring’s list of denials:

  1. The company strongly avers that Sanford Wallace has nothing to do with Broadspring. Specifically, “Sanford Wallace was not a ‘founder’ of either Broadspring or Mindset. In fact, he has never held any equity in either of these entities nor has he ever served as an officer, director or employee of either entity.”
  2. Broadspring attest that Atrinsic is not a “notorious ringtones company” and that the merger was done on the up-and-up, with full disclosure to the SEC.

In addition to defending their own position, Broadspring used the protective umbrella of their lawsuit to throw some punches Congoo’s way. “Misleadingly laudatory” was how Broadspring’s lawyers described Adblade’s section of the Squidoo lens in question. Broadspring also seized the lawsuit opportunity to allege that a “substantial portion” of Adblade’s revenue comes from “continuity credit card offers” and that the defendant “falsely asserts that Adblade is very selective about the publishers with which it works.” (#marketinglitigation)

Cited Civil Charges

In their claim, Broadspring’s lawyers cited violations of Section 43 of the Lanham Act, defamation per se and tortious interference. To recompense for said violations, Broadspring suggests damages, injunctive relief and attorney’s fees. The Plaintiff also wants a jury trial.

Lanham Act

The 1946 Lanham Act is the backbone of United States intellectual property law. It’s also the statute that helps guard against false advertising. In this case, Lawyers for the plaintiffs argue that Congoo’s statements about Wallace’s link to Broadspring constitute false advertising.

Defamation Per Se

Defamation per se is loosely defined as ‘defamation in it of itself,’ meaning the plaintiff does not have to prove special damages. For example, calling someone a criminal is considered defamation per se because the damage done is evident.

Tortious Interference

If one party interferes with another party’s business relationships, tortious interference charges can be brought. In this instance, Broadspring claims that Congoo’s solicitation of geology.com qualifies as tortious interference.

Gray Area

Broadspring v. Congoo is worthy of examination because it demonstrates how companies compete in today’s aggressive digital marketplace – where hungry entrepreneurs thrive on boundary pushing and use litigation in creative ways. Moreover, it’s a case that relies on exactitude and creating legal loopholes via verbiage.

What do I mean by that?

Well, let’s take Wallace Sampson. Part of Broadspring’s argument turns on whether or not he is materially connected to the business. If he is, it could be reasoned that no false statement of fact exists, thereby rendering the defamation lawsuit moot. If Wallace Sampson is not materially tied to Broadspring, the plaintiff has a much stronger case.

So now let’s look at how the lawsuit is worded. Sampson is described as never having been a director, officer, or employee of Broadspring. But is he a consultant? And if Sampson is somehow profiting from Broadspring, just not as a director, officer or employee, does Congoo have the legal right to highlight this fact? Furthermore, again, if Wallace is working with Broadspring in a freelance capacity, is he violating an FTC edict by acting as a consultant to an advertising company?

The Path To Victory

Since this case is a civil one, and Broadspring is bringing suit, it is responsible for providing the preponderance of evidence. Congoo simply has to present an argument that blocks Broadspring from satisfying the “balance of probabilities” standard for winning a civil proceeding. So, the question becomes, “what does Broadspring have to do to win the case?” Let’s take a minute to break it down.

Fundamental Elements of Defamation Under United States Law

While exact standards differentiate from jurisdiction to jurisdiction, slander and libel law is built on four basic elements:

  1. A false statement of fact;
  2. Material harm inflicted on the plaintiff;
  3. Communication to more than one person in private; and
  4. Intent to evoke a bad outcome for the plaintiff or “reckless disregard for the truth.”

So, in order for Broadspring to win this suit, the company must prove:

  1. Congoo’s accusations are false;
  2. Broadspring lost clients and money as a result of the widely distributed false statement; and
  3. Congoo purposefully lied with the goal of harming Broadspring’s business.

Arguably the most important part of a defamation case is proving speciousness. In order to do so, the plaintiffs must include precise examples of provably false statements. In this instance, Broadspring identifies the following three declarations as bold-faced lies:

  1. The Plaintiff was “shut down by the FTC;”
  2. Broadspring was “founded by [a notorious spammer who] was banned from online activity for 5 years.”
  3. Broadspring executive “entered into a settlement with the FTC because ‘6 million users [were] scammed.’”

Point two may prove to be the most complicated. In their response to the lawsuit, Congoo maintains that it did not promote any false statements of fact. Now, that could mean one of two things: a) nobody from Congoo played a role in creating the Squidoo lens in question or b) Congoo thinks it has sufficient proof that Wallace Sampson is involved with Broadspring in some profit-earning manner.

We’ll be keeping an eye on this case. The outcome could very well have a profound effect on Internet trade libel law. Moreover, the ruling in this case could further define ongoing rules of conduct for people who’ve lost a case against the Federal Trade Commission.

In the meantime, if you need a defamation or online marketing compliance lawyer, get in touch with Kelly Warner. We’re a full-service legal practice with attorneys who focus on cyber libel and Internet advertising law.

Is Safe Harbor Section 230 of the CDA Going Away?

A group of attorneys general wants to change Section 230 of the Communications Decency Act. If they succeed, website operators could be held responsible for user comments and posts. The AG coalition says they simply want the same rights as federal prosecutors, but free speech advocates warn that the proposed change could usher in a whole new era of Internet censorship.

What Is Section 230 of the CDA?

One of the most talked-about United States Internet laws is section 230 of the Communications Decency Act. Passed in 1996, and commonly known as the safe harbor provision, section 230 absolves U.S.-based website operators from liability if a third-party posts something illegal on their websites. Most often, section 230 cases deal with intellectual property violations and online defamation.

What Do The Attorneys General Want Changed In Section 230?

Section 230 of the CDA includes an exemption for federal crimes, which allows national prosecutors to bring charges against website operators in certain cases. Essentially, the cabal of AGs simply wants those extant rights extended to the state level by adding the words “ward or state” to the federal exemption provision.

Drug sales, child pornography and piracy, so the attorneys general argue, are the real issue at hand, arguing section 230 gives bad guys “immunity” from prosecution.

Why Is There Opposition To The AG’s Proposal?

Free speech is a pillar of American law. We take our right to voice our opinions seriously. So it should come as no surprise that a group of high-profile legal scholars, associations and companies wrote a letter voicing their displeasure with the AG’s plans for section 230. In the missive, opponents opined “Section 230 has enabled investment in countless revolutionary services that are responsible for a fifth of U.S. economi

New COPPA Rules Could Mean Big Bucks For Startups

COPPA lawsuits
Are the new Children’s Online Privacy Protection Act going to cost startups a whole lot of money?

As of July 1, 2013, the new Children’s Online Privacy Protection Act (COPPA) rules are in effect. The Federal Trade Commission (FTC) regulation is aimed at protecting child privacy online, but internet companies aren’t thrilled with the FTC’s definition of “personal information” under the new guidelines. They foresee the law as a financial burden for some start-up companies and a disaster for others. Estimated annual costs of the new regulation are said to be $6,223 for current Web services and $18,670 for new companies. However, some tech experts feel that small new companies, which provide third party services such as ads or plug-ins, will forego collecting interactive content altogether rather than go through what may be a complicated parental consent process.

An attorney for FTC said the new regulation was a needed update on the Children’s Online Privacy Protection Act, passed by Congress in 1998 over growing concern for deceptive online advertising aimed at kids. The protection act was intended to get parents more involved with online data involving their children and to protect the privacy of “personally identifiable information of children collected online.” FTC Associate Director Maneesha Mithal claimed that “parents should be in the driver’s seat.” They should know the data that is being collected about their children, how it is collected, and how it is being used. Under the new rule, these internet groups can be held liable only if the FTC can ;show that they deliberately sought and collected personal information from children.

A non-partisan technology think tank, TechFreedom, hosted a panel discussion on the new rule, during which its president, Berin Szoka, claimed, “The reality is most of the sites and services, like Facebook or Twitter, don’t have an option available for kids.” Advocates voiced skepticism about the new ruling’s effect on online advertising and so-called kid friendly websites. It was suggested that PinewoodDerby.org, a Boy Scouts website, might be affected by the new rule.

Everyone wants kids to be adequately protected online, but is the wording of COPPA a recipe for disaster that will create unnecessary boundaries to entry in the tech field?
Are you a start-up that wants to make sure you’re COPPA compliant? Contact Kelly Warner Law for a website audit. For the record, a COPPA violation could cost you millions. So, if you haven’t considered the statute before, it’s a good idea to do so now – especially since the law has broadened.

Should I Sue For Defamation?

Should I sue for defamation?
Should I sue for defamation?

Being defamed is a downer. It can bar you from employment or kill your business’ bottom line. When disparagement strikes, your immediate reaction may be to sue, Sue, SUE, darn it! Before you step into the litigation ring, though, take time to consider whether or not filing a defamation lawsuit is the best option in your situation.

U.S. Defamation 101: Proof of Harm Needed

The United States has the most defendant-friendly defamation laws in the Western world. As such, In order to win a defamation case, a plaintiff must prove actual material loss, not just hurt feelings. If you’re a business filing a trade libel lawsuit, the most convincing evidence is bank records showing significant loss directly correlated to the date of the defamatory incident. If you are filing a personal defamation lawsuit, different levels of proof will be required depending on the specifics of your case.

Other factors are weighed when deliberating defamation lawsuits, but proving actual damage is perhaps the most important, save for when the charge is defamation per se.

If the Person Isn’t Lying, Tread Carefully

Perhaps the most important thing to remember about slander and libel is succinctly summed up in the adage, “It isn’t defamation if it’s true” – especially in the United States. If a defendant can provide a preponderance of evidence that the statements in question are 100% true, 9 times out of ten they will win the case. So, before rage consumes your sensibilities, be honest with yourself before moving forward with a slander or libel lawsuit.

Sometimes Bad Publicity is Just That, Bad Publicity

Shouting “SLANDERER” from the roof tops belies the belief that “any publicity is good publicity.” Because sometimes publicizing a tale of defamation woe only ends up biting the plaintiff in the butt. After all, gossip is too juicy for some people not to believe. So, before you get loud about a situation, be sure to read as much as possible about defamation law to determine if you have a solid case. If you’re unsure, consult an attorney that specializes in slander and libel law. Your best bet is to find one that doesn’t discuss their cases online or announce every new client with a press release. For when it comes to defamation lawsuits, discretion is of the utmost importance in most cases.

Now, exceptions exist for nearly every rule. In some rare cases, making a big stink over a defamation lawsuit can benefit the plaintiff, and, if done correctly, can be an effective way to clear one’s name publicly.

If someone has legitimately defamed you, by all means, sue. Just remember to weigh all the facts carefully before embarking down litigation lane.

Are you considering filing a defamation lawsuit? To learn more about slander and libel law, go here and here. If you want to speak with a defamation lawyer, with an impressive win record, go here. If you want to know more about international defamation law, check out the Kelly Warner International Defamation Law Database.

Instagram Defamation Case: The Game v. The Governess

Will The Game win his Instagram defamation case with the babysitter?
Will The Game win his Instagram defamation case against the babysitter?

Hip Hop artist and VH1 family programming celebrity The Game is feuding, y’all. This time, he’s beefing with his kid’s babysitter, whom we’ll call *Jane.* The battle ground? L.A. Superior Court. The issue? Instagram defamation.

This tale of social media woe began about a month ago. One day, while kibitzing on social media, The Game learned that his friend, Nas, had hired caretaker *Jane*, whom had once worked at la casa Game; her tenure, allegedly, ignominiously cut short. On Instagram, Game imputed, “She was busted having sex with her boyfriend and leaving a used condom and the wrapper in my daughter’s room!!!”

Then The Game got graphic. He published a picture of Jane with the caption, “Beware if this person is watching your children, she is a very dangerous baby sitter.” He also posted her Twitter and Instagram handles.

Humiliated and shunned from the Nanny Industrial Complex, Jane decided to move forward with an Instagram defamation case. According to her claim, because of the posts, she’d lost her job and ability to work, which triggered a serious bout of depression.

How To Win An Instagram Defamation Case

To win, Jane, the plaintiff, must prove that The Game was lying; or, at least, didn’t engage in proper due diligence before publicly posting the accusations. She’ll probably also have to prove that she never knocked boots in The Game’s daughter’s bedroom.

If, indeed, The Game was mistaken, he could still escape the legal guillotine by arguing the jocular nature of social media. In other words: social media is a notorious platform for overblown smack talk and satire, and the average person wouldn’t believe my accusations; so, the statements in question shouldn’t be considered defamatory. It’s a stretch, but if done well, could work.

Want to read about more Instagram defamation cases and other social media lawsuits? Head here.