Being Bad With Technology

February 6, 2011

The recent skewering of Kenneth Cole’s CEO by the “twittersphere” for his bad attempt at humor by connecting this past week’s mass protests in Egypt to the Kenneth Cole brand provides one of those object lessons that I’m sure make marketing people cringe (although I’ve heard cynical PR folks observe that even this type of publicity is priceless in a good way) and that we all get with the benefit of 20/20 hindsight.  There have been other notable inappropriate uses of new media by businesses and their executives, but considering the relative age of such technologies, I’d suggest that some of the authors of these faux pas probably deserve to be cut some slack.  Whether such leniency will be in order say 10 years from now  – when the contours of propriety with this stuff will have been better worked out — is another story.

However, the Kenneth Cole incident brought to mind the case of Vitaly Borker and his DecorMyEyes.com website, which is a truly sordid episode of the misuse of online technology for marketing purposes (of a sort) that unfolded a couple of months ago.  The DecorMyEyes situation seems to have received far less attention, at least based on the instances where I’ve mentioned it to others and realized they had not heard of it, so I thought I’d provide a brief overview. 

In a truly terrific piece of investigative reporting by NY Times writer David Segal, who was working on a story about why Brooklyn-based DecorMyEyes had generated such a substantial number of consumer complaints, Borker revealed in an extensive and audacious interview with Segal that part of the business model for this web-based business was to antagonize his customers to the point that they would write negative, even scathing reviews.  Sounds weird, right?  Except that Borker had somehow stumbled upon the realization that any publicity, especially bad publicity such as persistent customer criticism, jacked up his rankings in Google searches because, according to him, Google’s algorithm did not factor out negative feedback.   Here’s an excerpt from Segal’s piece:

Today, when reading the dozens of comments about DecorMyEyes, it is hard to decide which one conveys the most outrage. It is easy, though, to choose the most outrageous. It was written by Mr. Russo/Bolds/Borker himself.

“Hello, My name is Stanley with DecorMyEyes.com,” the post began. “I just wanted to let you guys know that the more replies you people post, the more business and the more hits and sales I get. My goal is NEGATIVE advertisement.”

It’s all part of a sales strategy, he said. Online chatter about DecorMyEyes, even furious online chatter, pushed the site higher in Google search results, which led to greater sales. He closed with a sardonic expression of gratitude: “I never had the amount of traffic I have now since my 1st complaint. I am in heaven.”

Perverse, for sure.  Perhaps if he had stayed below the radar screen with his unethical gamesmanship, Borker would today still be harassing consumers and enjoying his laughter all the way to the bank.  But the arrogance that he flaunted in his NY Times interview caught the attention of local and federal law enforcement and resulted in a major comeuppance when he was arrested by federal postal authorities several days after the interview on charges of mail fraud, making threats to customers and fraudulent business conduct. 

The entire original article by Segal makes for fascinating reading, as well as the ensuing comments over the following weeks from many readers and Google about its search algorithm and related changes.  While several organizations came across as less than diligent in their customer safeguards, the online retailer Amazon fares well in the piece.  Lots of lessons here.  For consumers, do your research before you buy online.  More generally, if you base your business strategy on a faulty premise, such as the unethical use of a technology platform, expect that the dumb behavior will eventually catch up with you, and that arrogance can only sustain itself so long.


FTC Proposes New Privacy Framework

February 3, 2011

In December 2010, the Federal Trade Commission issued an extensive staff report outlining a proposed new framework for consumer privacy protections for use by businesses.  The report, a copy of which is available here, results from an extensive review and a series of public roundtables conducted by the FTC over the past year on evolving privacy issues.

The framework contemplates three core principles: (i) so-called “privacy by design”, which requires an organization to promote sound privacy practices throughout all aspects of their operations and product or service offerings, (ii) simplified consumer choice, and (iii) greater transparency about data practices.  The report is useful in providing extensive background on the FTC’s enforcement activities in the privacy area.

Because the FTC plans to sort through the public comments solicited on the report (the comment deadline was recently extended from January 31 to February 18) and to decide later in 2011 what further recommendations it might make based on that feedback, it is too early to assess whether the proposed framework will, in fact, result in a notable shift in the FTC’s approach to enforcement of offline and online privacy practices.


Social Media Marketing Legal Issues

February 1, 2011

The Winter 2011 issue of my firm’s law and business publication, Trust the Leaders, focuses on Social Media and the Law.  That issue includes an article by me on social media marketing concerns, “Social Media Marketing:  The 411 on Legal Risk and Liability,” in which contractual concerns, compliance obligations and publisher’s liability issues, among other matters, are discussed. 

Also included are articles by a few of my colleagues on other legal-related social media topics, including intellectual property and workplace issues.

The full issue is available here:  Trust the Leaders Winter 2011 or at http://www.sgrlaw.com/resources/trust_the_leaders/leaders_issues/ttl28/


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