Anti-Spam Lawsuits: Prosecution as PR?

Do major Internet service providers (ISPs) favor publicity-rich lawsuits in cooperation with state attorneys general over the Federal Trade Commission’s (FTC) quieter, behind-the-scenes legal actions?

The FTC is willing to work with ISPs to fight spam, a source within the agency confirmed to ClickZ News. Yet the agency has concerns the major ISPs are more interested in the publicity that’s part and parcel of lawsuits pursued with state attorneys general. The FTC is charged with enforcing and helping to further define federal anti-spam legislation.

Though last week’s announcement of the filing of the first major lawsuits under the federal Can-Spam act did not involve attorneys general, the attendant ballyhoo seemed to underscore FTC concerns.

With a full-bore press conference in Washington and a ton of media attention, the four biggest U.S. Internet service providers announced the suits.

Executives from America Online, Microsoft, Yahoo and EarthLink held forth for about an hour about their commitment to combat spam. Yet basic information such as the names of the alleged spammers or jurisdictions involved was barely (and incompletely) mentioned at the event. Many of the defendants were “John Does,” persons whose identity was unknown to the litigants.

Recent splashy suits include the $38 million combined lawsuits filed by Microsoft in partnership with New York Attorney General Eliot Spitzer in December against a spam network allegedly responsible for sending more than 250 million junk emails daily. The action was announced at a press conference and was widely reported.

“I think the greatest value to these anti-spam lawsuits is the public relations value,” said attorney Ray Everett-Church, chief privacy officer of anti-spam technology company TurnTide.com and co-author of Fighting Spam for Dummies. “I’m all in favor of suing spammers, but it has been done before and does not appear to have much impact.

“By demonstrating to their customer base how vigorous their anti-spam efforts are, [service providers] are adding to the perception that they are effectively combating the problem.

“A quiet prosecution by the FTC doesn’t necessarily give these companies the kind of bang for the buck they are probably looking for,” Everett-Church said.

“There is no question that the announcement [last week] was intended to generate a ton of buzz and good will for the four,” said Anne Mitchell, president and CEO of the Institute for Spam and Internet Public Policy, “If they did nothing differently except not having the press conference, no one would be asking these questions.”

Asked about Microsoft’s criteria as to which agency it works with when prosecuting spammers, spokesman Sean Sundwall said, “We have worked behind closed doors with the FTC in sharing best practices and gathering information. We work together, it doesn’t mean we’ll file a suit together.”

As to working with state versus federal authorities, Sundwall said, “There are no particular advantages or disadvantages. Basically a state attorney general is an enforcement body under state law. Our only choice under the law is to work with the attorney general.” Asked if it was not possible to work with the FTC on a case involving state law, Sundwall clarified, “Yes, we can, but they’re not the enforcement body. We can work with them doing fact-finding.”

Told an FTC source believes ISPs may favor lawsuits with attorneys general for the publicity, Sundwall replied, “I don’t know what to say to that.” He noted Microsoft was part of the Spam Forum the FTC held in Washington, D.C. last year.

EarthLink worked with the New York Attorney General to pursue Howard Carmack, the “Buffalo Spammer.” It won a $16.4 million judgment and injunctive relief against Carmack in U.S. District Court in Atlanta in early 2003. Carmack was subsequently arrested on felony and misdemeanor counts.

“We worked with the Attorney General as opposed to the FTC because we were investigating in New York State and had information that was helpful to them and they had information helpful to us as well,” said Dave Baker, VP law and public policy at EarthLink. Baker wouldn’t elaborate about the advantages and disadvantages of working with either authority.

Asked why AOL chooses to work with state attorneys general as opposed to the FTC, spokesman Nicholas Graham said, “The question is wrong in its premise.

“We have worked with the FTC and continue to do so. We meet with the FTC’s staff members and commissioners on a regular basis with regard to issues concerning unsolicited bulk commercial email,” said Graham.

Asked if AOL has worked on cases against alleged spammers with the FTC, he said, “There are things we do not comment about. We would refer you to the FTC on that. We have worked on investigations before. We do not comment on ongoing government collaboration and investigation.”

Yet Randall Boe, AOL’s executive VP and general counsel, spoke at length about the six Can-Spam lawsuits last week, at the press conference held by the four ISPs involved in the suits.

With regard to the advantages and disadvantages of working with the FTC and attorneys general, Graham said, “The techniques that are used by the most egregious spammers may violate state and federal laws at the same time. Cooperating with both federal authorities like the FTC and state authorities like the attorney general allows AOL to have the flexibility to be able to achieve the maximum possible deterrence.

“A really good example of our ongoing work with attorneys general would be the work we do here in the Commonwealth of Virginia with Attorney General Kilgore and his excellent staff. On December 11, 2003, we announced the very first ever criminal indictments of spammers under Virginia’s anti-spam laws,” Graham said.

“One other example of our ongoing work with our attorney general is our determination and willingness to meet with AGs interested in tough new criminal penalties against the most egregious spammers. We’ve been a very helpful resource for them in the ongoing state-by-state spam battle,” Graham said.

“I think the effort to deal with spam is not simply bringing enforcement actions. That’s a very, very small part of the solution,” said Kenneth Dreifach, chief of the Internet Bureau of the office of the New York Attorney General. Dreifach, whose office worked with EarthLink in its successful case against the Buffalo Spammer, praised the FTC’s work.

Dreifach said ISPs occasionally approach the AG. Microsoft approached the office in the case against a New York-based spam ring allegedly led by Scott Richter in which Microsoft and the AG filed lawsuits in December.

The attorney said there is room for attorneys general and the FTC to work together against spam, and both do an effective job.

“The federal government has considerably greater resources than any individual state government. The federal government may as a practical matter have greater enforcement power in complex cross-border situations. That said, the state AGs have had a good amount of success as well,” Dreifach said, “Our interests are all aligned.”

Yahoo, through its public relations agency, said spokespeople on the litigation side were traveling and could not be reached for this story.

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