AOL, The Huffington Post Are Sued Over Website Contributors' Compensation

AOL Inc. (AOL) and its newly acquired Huffington Post were sued over claims that the writers of website content weren’t paid for their work.

The complaint, filed today in U.S. District Court in Manhattan, charges that none of the $315 million paid by AOL for the news and opinion website co-founded by Arianna Huffington and Kenneth Lerer was shared with the writers and other creators of the site’s content. The suit seeks class-action, or group, status.

“The HuffingtonPost.com has been unjustly enriched by engaging in and continuing to engage in the practice of generating enormous profits by luring carefully vetted contributors, with the prospect of exposure,” the complaint said, “while reaping the entirety of financial gain derived from such content.”

AOL acquired Huffington Post in March in order to “create a next-generation American media company with global reach,” AOL Chief Executive Officer Tim Armstrong said in a statement when the deal was announced in February. Combining the companies’ websites yielded an Internet audience of 117 million Americans, AOL said. HuffingtonPost.com had almost 25 million monthly visitors as of February.

The complaint claims that the writers provided the site with free content worth as much as $105 million, which “should be returned” to the plaintiff and the class. Huffington Post derives revenue from advertising on the site.

Freelance Writers

The suit was brought by Jonathan Tasini, who is described in the complaint as the lead plaintiff in a successful case against the New York Times over the rights of freelance writers. He was president of the National Writers Union from 1990 to 2003 and sought the Democratic nomination for U.S. Senator from New York in 2006, according to the complaint.

“The lawsuit is wholly without merit,” AOL said in an e- mailed statement from Huffington Post Media Group spokesman Mario Ruiz. “As we’ve said before, our bloggers use our platform -- as well as other unpaid group blogs across the Web - - to connect and help their work be seen by as many people as possible.”

Arianna Huffington was named editor in chief of the newly created Huffington Post Media Group, which includes other AOL sites such as TechCrunch, AOL Music, Moviefone and MapQuest. She and Lerer are also defendants in the lawsuit.

‘Artificially Low’

The suit alleges that Huffington Post set “an artificially low price for the valuable digital content created by” Tasini and other members of the potential class. There are about 9,000 unpaid content providers to the site, according to the complaint.

A federal judge will decide whether to grant the lawsuit class-action status.

The complaint states that Tasini contributed 216 pieces of content to the site without compensation, and that he and other writers were encouraged to send links to their stories to friends and followers on Facebook and Twitter to help build consumer traffic to HuffingtonPost.com.

Tasini’s pieces included two titled “The Rich Get Richer: Time for a Change” in 2008, and “New York Times Fuels War Against the Middle Class” in January. His earliest listed piece for the Huffington Post, in December 2005, was titled “Why I’m Running Against Hillary” Clinton.

The U.S. Supreme Court ruled in 2001 that the Times and other publishers violated the copyrights of authors by putting their articles on websites without permission.

AOL rose 18 cents, or 0.9 percent, to $19.98 at 4 p.m. in New York Stock Exchange composite trading. The shares have fallen 16 percent this year.

The case is Jonathan Tasini v. AOL Inc., 11-2472, U.S. District Court, Southern District of New York (Manhattan.)

To contact the reporter on this story: Donald Jeffrey in New York at djeffrey1@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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