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"Want a FAT Paycheck? Sign up today!" "10 bucks on the house, no obligation." "NO Prescription Drugs!" Most people recognize e-mails with such subject lines as the calling card of spam. But are they in fact illegal, or are they simply unsolicited e-mail, unwanted perhaps but not illegal?
That is at the heart of a nasty legal dispute between one of the Net's highest-profile spam-fighters and a hyper-aggressive marketing firm based in Illinois. The battle has escalated in recent days. The marketing firm e360Insight is pressing to shut down The Spamhaus Project, a London-based e-mail filtering organization, in the wake of an $11.7 million civil judgment that e360Insight won against The Spamhaus Project for labeling the firm a spammer.
While e360Insight has been stymied in its effort so far, top executives vow to use whatever legal recourse they have. How the dispute plays out in the weeks ahead will have implications for tech companies, marketing firms, and anyone who uses e-mail.
PLENTY OF AMBIGUITY.
The controversy underscores the deficiencies and inconsistencies of U.S. legislation. Congress passed the CAN-SPAM Act in 2003, to much celebration. But the ambiguities of the law are confounding efforts to keep unwanted bulk e-mailings in check. For instance, CAN-SPAM allows bulk mailings provided they are marked as advertising and have an opt-out method, among other things.
e360Insight argues that its e-mails, sent on behalf of clients such as BargainDepot.net, comply with the CAN-SPAM Act and were only sent to computer users who signed up for e-mail alerts. "We are a responsible marketer, we don't have any interest in sending any e-mail to someone who does not want to receive it," says e360Insight CEO David Linhardt. "We only send messages to those who want to receive them and somebody can always opt out if they want to opt out."
SEEKING A SHUTDOWN.
On Sept. 13, an Illinois court ruled that Spamhaus must pay e360Insight $12 million in damages and litigation costs for listing the company as a spammer. Spamhaus repeatedly blocked e360Insight's e-mail messages from reaching its customers' inboxes, in spite of requests to be removed from the ranks of known spammers. The Illinois ruling was made in the absence of a defense from Spamhaus, which maintains that the Illinois court does not have standing to decide the matter.
Spamhaus maintains that its clients consider e360Insight's e-mails spam. Despite the ruling, it refuses to remove Linhardt from its list, saying in statements on its Web site that the Illinois court has been duped. The statement characterizes the plaintiff as an aggressive spammer who repeatedly sent unsolicited e-mails to nonexistent users as well as Spamhaus' clients and employees. E-mails to Spamhaus were not immediately returned.
Linhardt's lawyers have filed a request with the judge to ask the Internet Corporation for Assigned Names and Numbers, which manages domain name addresses, to shut down Spamhaus. In a response, dated Oct. 9, ICANN wrote that it does not have the ability or authority to suspend domain names.
TRICKY BUSINESS.
Even if ICANN can't shut down Spamhaus, the ruling should give anti-spam services pause over whether shutting off spam opens them up to litigation and costly judgments. John Levine, a board member with the Coalition Against Unsolicited Commercial E-mail [CAUCE] and author of Internet for Dummies, says that the problem is the CAN-SPAM Act has protected what people consider unwanted e-mail. "The problem with CAN-SPAM is that much of what is legal is still spam by any reasonable definition," says Levine. "So Spamhaus' definition of spam is bulk e-mail and sometimes they have to guess what bulk e-mail is spam. But they guess pretty well."
Sara Radicati, CEO and president of The Radicati Group, a research firm that studies spam, agrees that the CAN-SPAM Act and other state laws attempting to limit spam have left a fuzzy fine line between what is illegal spam and what is unsolicited email. "All of these laws are attempting to do good, but they are all going to word things a little differently," says Radicati, adding that deciding what is spam is "enormously difficult and it has always been an incredible gray area and even the same person may want to receive something one day and other times may not want it." [See BusinessWeek.com, 10/30/03, "Needed: A Beefier CAN-SPAM Bill".]
With both the law and consumers making allowances for some kinds of bulk mail, deciding between allowable mass mailings and unwanted junk messages can be both tricky and risky for anti-spam services. Yet, the demand for e-mail filters has never been greater. According to a June, 2006 study by the Radicati Group, the e-mail security market is expected to bring in $3.5 billion in 2006 and grow to $6 billion by 2010.
FILTERS PROLIFERATING.
Fueling the demand are an increase in spam messages and a rise in so-called "phishing" messages meant to trick users into giving away their secret passwords and account information to criminals posing as legitimate companies [see BusinessWeek.com, 9/16/06, "Rising Stakes in the Spam Wars"].
Guy Maldonado, a product manager at anti-virus and security software provider McAfee (MFE), says that his company sees increasing demand for anti-spam technology. "The threat and the demand, they are both increasing," says Maldonado. "Spam is a very insistent problem that doesn't seem to go away." [See BusinessWeek.com, 6/15/06, "Yahoo Mail Sees Spam Everywhere".]
McAfee now provides roughly 22 million users worldwide with spam filtering technology. To Maldonado, spam and most bulk e-mail are the same things -- unsolicited, unwanted junk. McAfee's e-mail filters block messages based on whether consumers identify it as spam, if it includes hidden text or HTML errors, or it if it has a certain image-to-text ratio present in most spam e-mails, among other things. The company also has a free SiteAdvisor that warns computer users when a visited URL is known to send unsolicited bulk e-mail.
SETTING PRECEDENT.
Similarly, Secure Computing, a San-Jose-based security firm specializing in protecting businesses from spam, enables companies to block any e-mails they deem "spam" whether they technically comply with the CAN-SPAM Act or not. Both McAfee and Secure Computing maintain that their spam policies would not be subject to lawsuits such as the Spamhaus suit, because they're protecting their consumers from receiving messages they clearly don't want.
"The companies own their networks and they own the resources on their networks, so they have full rights around what can enter that network," says Paul Judge, Secure Computing's chief technology officer. "It's like your home or your property, you can control what can enter."
There is legal precedent for anti-spam filters choosing to block all bulk e-mails, regardless of whether they obey CAN-SPAM or not. CAUCE's Levine says that in most cases, spam filters are protected under portions of the 1996 Communications Decency Act, which was initially enacted to block mass pornographic e-mails. "Part of that [act] which was never challenged offers broad immunity to anybody who does good-faith blocking of offensive e-mail," says Levine. "Spamhaus has a good-faith belief that all the stuff they are blocking is unwanted spam."
The ruling against Spamhaus, however, could indicate that more than just a good-faith belief that bulk mail messages are unwanted is needed to avoid losing litigation. That, or at least an affirmative defense combined with proof that messages are unwanted by clients. After all, when advertising finds a willing audience it's a good thing for both advertiser and audience. "One person's spam is another person's information," says Radicati.
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