Social networking site Tagged.com has agreed to pay $750,000 in penalties and costs to settle lawsuits alleging it engaged in deceptive email marketing practices. As part of the settlements, reached with New York and Texas, the San Francisco-based company also agreed to adopt reforms around its use of invitation emails. You can read more in this MediaPost Online Media Daily article.
The two states sued Tagged earlier this year for allegedly duping new members into providing their email addresses and passwords. Tagged then sent emails to members' contact lists that appeared to have been sent directly from the members themselves.
In addition to paying the fines, the agreement calls for Tagged to provide clear and conspicuous notice to users before accessing their email inboxes and to obtain users' explicit consent before sending email invitations to their contacts. On its blog, Tagged says it has overhauled its registration and invite-your-friends processes, and will soon be adding more new features to increase member privacy.
This is an interesting case on its merits, but what struck me is the potential implications for forward-to-a-friend and viral emails. While it's not the same thing, many marketers elect to have their viral emails appear to come from the friend who signed the person up rather than from the marketer. In this case, the friend had more knowledge about the resulting email(s), but I have to wonder if some future court will take this ruling and seek to apply it to the age-old forward-to-a-friend technique.