iLegal – Thinking through Azoogle’s Settlement with the Florida AG

Much has been written regarding Azoogle’s recent $1,000,000 settlement with the Florida Attorney General. The Florida Attorney General apparently felt that the manner in which Azoogle advertised “wireless services” (primarily ring tones) through its network, was misleading. After what were certainly extensive negotiations, Azoogle reached a settlement which avoids protracted litigation and the potential imposition of much greater consequences.

From a business perspective, this is probably a good move for the company. A protracted litigation is an expensive and time consuming distraction to doing business on a daily basis. Depositions, document requests and court appearances take the time and energy of key people in an organization. The longer an investigation or litigation continues, the more potential there is for long term corporate reputation damage.

For those who haven’t yet seen the settlement document, it can be found at: http://myfloridalegal.com/webfiles.nsf/WF/KGRG-78QMWR/$file/Azoogle-AVC10-31-07.pdf.

There are several important provisions in the Agreement.

1. Cash Settlement As everyone knows by now, Azoogle paid a cool million dollars to wrap this up. However, you may not be aware that this money was contributed to special fund to allow the Florida AG , “to assist with the costs of future investigation and enforcement efforts related to the third party wireless content industry.” So now the Florida AG has relatively unlimited funding to continue to pursue investigations and prosecutions along the line of the Azoogle investigation.

2. Cooperation. Azoogle has agreed to cooperate and provide information to the Florida AG to aid them in furthering their investigations and prosecutions. This information is stated as specifically “including but not limited to Azoogle’s current and former publishers.” If you have been, or are part of Azoogle’s network, then that means you and your company.

Remember, even if your company is innocent, simply being the subject of an investigation can be very damaging. Many companies and individual affiliates do not possess the resources what would allow them to aggressively negotiate and effectively defend themselves. In extreme cases, it’s possible that such an investigation could be the death knell for a small company.

Congratulations go out to Azoogle for wrapping up a difficult situation and moving forward. But stay tuned; the Florida Office of Attorney General isn’t finished with this issue.