BY DAVID SPEAKMAN
When it comes to fighting unsolicited commercial e-mail, an increasing number of companies are forced to use an expensive option — relying on an ill-equipped legal system to staunch the ever-growing spam flood.
Anti-spam lobbying groups are pressing state and federal lawmakers to solve the problem that costs consumers and businesses billions each year.
Critics say that unlike mass marketers’ postal junk mail or telemarketing calls, consumers bear the financial burden of spam through increased Internet access fees. For instance, America Online (AOL) estimates each subscriber’s monthly bill is 15 percent higher because of spam-related expenses.
The Coalition Against Unsolicited Commercial Email (CAUCE) says it’s like paying postage for unwanted junk mail or being billed for unwanted telemarketing calls.
Business costs of dealing with spam, including information technology expenses, increased bandwidth charges and lost productivity, will tally $10 billion in 2003, according to government and industry estimates. That’s enough money to rebuild the World Trade Center 20 times.
At the forefront of the legal battles are Internet service providers, the largest private suppliers of consumer e-mail addresses.
“We consider ourselves pioneers in the war against spam,” says Karen Cashion, an Atlanta-based assistant general counsel for EarthLink Inc. “On the legal front, we have been very aggressive and have filed dozens of lawsuits over the years to stop the actions of spammers.”
However, EarthLink has no clear federal law on its side.
“When it comes to anti-spam laws on the federal level, it’s easy to summarize: There is nothing,” says Ray Everett-Church, legal counsel for CAUCE.
CAUCE is an all-volunteer, Internet-based tech industry lobbying group with leadership ties to companies such as Microsoft Corp. and America Online Inc.
“I expect to see some legislation introduced in Congress within the next few months,” says Everett-Church from Fremont office.
He’s working with the staff of several U.S. representatives, including Zoe Lofgren, D-San Jose, and Anna Eshoo, D-Palo Alto. Meanwhile EarthLink, Microsoft, AOL Time Warner Inc. and others are applying a crazy quilt of existing laws in attempts to stop spam.
The legal patchwork includes federal racketeering laws, the Electronic Communications Privacy Act, the Computer Fraud and Abuse Act and federal trademark laws. But like using a butter knife as a screwdriver, it gets some jobs done but doesn’t work every time.
“Most of the big service providers are still using creative legal methods of existing laws Ã‰ [which] have been somewhat effective,” Everett-Church says. “But each time you go before a judge with one of those creative approaches, you risk a judge saying, ‘No, no, no. I’m not as creative as you.'”
So far, EarthLink has had the most visible successes, including a $25 million July 2002 federal judgment against Tennessee spammer Kahn C. Smith. But, most judgments are much smaller and cost prohibitive.
“I know an attorney in Palo Alto who has worked with a number of companies to fight spam and they get awarded a $50,000 judgment and legal bills of a quarter million dollars,” says Everett-Church. “You’ve got to have money to burn to go after spammers.”
EarthLink loses money fighting spam.
“It’s certainly not a money-making enterprise for us — or even break even,” says Cashion. “We do it to make the Internet a better place for our customers.”
EarthLink has a bottom line reason, too. It’s fighting spam to keep customers. Studies show the top reason customers stick with an ISP is because their e-mail address is not portable. But, when that address is targeted by spammers, users are likely to change e-mail accounts — and service providers.
Local law enforcement agencies say they have no effective spam weapon.
California has two spam-related laws from the 1990s, but neither allows consumers to block spam or recoup monetary damages. The law states commercial e-mail must be marked with the text such as “ADV” (for advertisement) in the subject line so spam filters can catch them with a maximum $50 penalty for non-conforming e-mail.
Local prosecutors say they won’t waste tax dollars enforcing current laws because they cannot stop spam.
“I would guess that it would be unlikely that we would take on one of these cases on our own, especially in the light the statute isn’t all that great,” says Al Bender, supervising deputy district attorney for Santa Clara County. “We need a ban on spam. Once we get that, it certainly will make an enforcement action more effective in the long run.”
Current state law is so unworkable that its author, state Sen. Debra Bowen, D-Redondo Beach, has introduced Senate Bill 12, which will rewrite California spam laws and allow courts to fine companies $500 for each spam violation.
That bill is in a Senate committee chaired by state Sen. Liz Figueroa, D-Fremont. She scheduled a March 24 committee vote to determine if the bill will be sent to the full Senate.
“We’ve been advocating federal legislation because state law is inherently bounded by state borders,” says Everett-Church. “A federal approach covers all states and gives you the same rights everywhere.”