03:27 PM

In The Fight Against Spam, A Few Knockouts

Microsoft wins $7 million spam settlement; complaints from AOL members drop 85%

Even bringing down someone labeled the "spam king" isn't going to stem the E-mail flood. Scott Richter has agreed to pay Microsoft $7 million to settle a lawsuit and pledged to stop sending unsolicited E-mails, but the spam sent out by Richter's company represented a mere 0.2% of all spam, according to Postini Inc., a spam-filtering service. "That's a drop in the bucket," says Andrew Lochart, Postini's senior director of marketing.

Richter will pay Microsoft $7 million and has promised to stop sending spam.

Richter will pay Microsoft $7 million and has promised to stop sending spam.

Photo by Ken Schles
Instead, technology is helping companies get an edge on spam. "The only reason it's not a problem is that someone invented software to remediate it," says Steve Lanzl, CIO and VP at paper-products producer Bowater Inc. One recent month, Bowater received 560,000 spam E-mails versus 200,000 legitimate messages, but employees rarely saw those unsolicited communications; they were routed to a server hosted by a third party. Bowater's help-desk personnel review spam to make sure legitimate messages aren't erroneously exiled.

Tom Holmes, VP of technology at auto distributor JM Family Enterprises Inc., gets only a couple of spam messages in his in-box each month, crediting Postini's Web-based spam-filtering service. "Spam doesn't hit my radar anymore; it's not an issue," he says.

There are signs that spam is nowhere near the problem it was a few years ago. America Online said last week that spam complaints among members dropped by 85% in nearly two years, and the number of spam messages AOL receives each day dropped by nearly half, or 1 billion a day, during that same period.

AOL gets less spam, a company spokesman contends, because of proprietary filtering technology and members alerting the provider about received spam.

All this doesn't mean spammers have given up. Postini estimates spam E-mails have increased by 65% since January 2002. In one 24-hour-period last week, spammers sent nearly 106 billion

E-mails, it estimates.

While it won't stop spam, the Microsoft settlement with Richter and a recent $13 million federal-court judgment favoring AOL against a group of spammers could deter some would-be spammers. "The decision will have chilling effect within our borders as spammers realize their assets will be subject to risk," says attorney Robert Holtzapple, a partner at Farella Braun & Martel.

Though the Richter deal is the largest spam settlement for Microsoft, it isn't the only one. The company has filed 106 suits against spammers and collected more than $1 million, says Aaron Kornblum, Microsoft's safety-enforcement attorney. Its biggest spam settlement before last week totaled $400,000. In preparing its lawsuits, Microsoft found that many spammers use the same Web-site developers, order-fulfillment houses, domain registrars, and other service providers. "It's a spidery web of different spammers using the same support networks," Kornblum says.

As spammers get desperate, they're shifting tactics. For example, a new wave of E-mails offers a range of security kits, extolled with subject lines such as "Protect your child from sex offenders! Download now!" says Clearswift Ltd., a security-software provider. The shift is a calculated attempt to frighten consumers into buying security products, says Clearswift research director Alyn Hockey, adding he finds selling PC security through spam ironic, since unsolicited E-mail is the same medium used to spread viruses, phishing scams, and spyware.

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