Last week, Topix.com founder and CEO Chris Tolles took to a Tech Crunch post to give advice to businesses that may, at some point or another, face investigation by and negotiations with state or local government officials regarding company practices. He makes some really good points, so I thought I'd share.
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The controversy began in February when Kentucky's attorney general (and U.S. Senate candidate) Jack Conway issued a press release asserting that Topix.com charged users $19.99 to remove slanderous or negative comments. Conway declared the practice "deplorable."
Tolles first found out about the accusations when a member of the media asked for his comment. Contrary to the press release, he said, the company did not receive communcation from Conway's office until days later.
Then Topix.com attorneys and "a bevy of assistant attorneys general" met. Tolles explained users could pay $19.99 to have their comment removal request prioritized so that it was addressed more quickly than the requests of non-paying users, but that the site did not require payment before abusive or slanderous comments were removed. The attendees then hammered out an agreement on the concerms raised by the state officials.
But after the assistant AGs took the results of the meeting back to their bosses, did they communicate directly with Topix.com? No, Tolles said. Attorneys general from 34 different states issued a second press release on the matter.
After all the trouble, Tolles learned a lot about what to do and what not to do when government investigators come calling on the basis of customer complaints.
His top three pieces of advice (in his own words):
- Pissed off people, not illegality, is the issue to watch....If a lot of people *think* you are doing something wrong, you are likely to be headed for a problem.
- Take [the inquiry] seriously and lawyer up...You really want to find folks who have worked with these guys, and potentially have been one of these guys, before.
- You're not a wimp, you're a pragmatist...Things quickly escalate, and it's unlikely to be good for business to be in a protracted fight with the government.