1/31/05
Despite U.S. law, the spam flows on
Up to 80 percent of all e-mail might be junk; offshore firms targeted
By TOM ZELLER JR.
THE NEW YORK TIMES
A year after a sweeping federal anti-spam law went into effect, there is more junk e-mail on the Internet than ever, and Levon Gillespie, according to Microsoft Corp., is one of the reasons why.
Microsoft lawyers seemed well on the way to shutting down Gillespie in September after he agreed to meet them at a Starbucks in Los Angeles near the University of Southern California.
There, they served him a court summons and a lawsuit accusing him, his Web site and 50 unidentified customers of committing multiple violations of state and federal law -- including the year-old federal Can Spam Act -- by flooding Microsoft's internal and customer e-mail networks with illegal spam, among other charges.
But that was the last the company saw of the young entrepreneur.
Gillespie, who operated a service that gives bulk advertisers offshore shelter from the anti-spam crusade, did not show up for a recent court hearing in King County. The judge issued a default judgment against him in the amount of $1.4 million.
In a telephone interview yesterday from Southern California, Gillespie, 21, said that he was unaware of the judgment and that no one from Microsoft or the court had yet followed up. But he insisted that he had done nothing wrong and vowed that lawsuits would not stop him -- nor any of the other players in the lucrative spam chain.
"There's way too much money involved," Gillespie said, noting that his service, which is currently down, provided him with a six-figure income at its peak. "And if there's money to be made, people are going to go out and get it."
In the year since the Can Spam Act went into effect, unsolicited junk e-mail on the Internet has come to total perhaps 80 percent or more of all e-mail sent, according to most measures. That is up from 50 percent to 60 percent of all e-mail before the law went into effect.
To some anti-spam crusaders, the upsurge comes as no surprise. They had long argued that the law would make the spam problem worse, by effectively giving bulk advertisers permission to send junk e-mail as long as they followed certain rules.
"Can Spam legalized spamming itself," said Steve Linford, the founder of the Spamhaus Project, a London organization that is intent on eliminating junk e-mail. And in making spam legal, he said, the new rules also invited flouting by those intent on being outlaws.
Not everyone agrees that the Can Spam law is to blame, and a combination of lawsuits invoking the new legislation -- along with other suits making use of tough state laws -- have been mounted in the name of combating the problem.
Besides Microsoft, other large Internet companies such as AOL and Yahoo! have used the law as the basis for suits. Two prolific spam distributors, Jeremy D. Jaynes and Jessica DeGroot, were convicted under a Virginia anti-spam law in November, and a $1 billion judgment was issued in a federal court in Iowa against three spam marketers in December.
And the law's chief sponsor, Sen. Conrad Burns, R-Mont., said it was too soon to judge the law's effectiveness, although he indicated in an e-mail interview that the Federal Trade Commission, which oversees its enforcement, might simply need some nudging.
The trade commission has made some recent moves that include winning a court order in January to shut down illegal advertising from six companies accused of profiting from thousands of X-rated spam e-mails. But so far, the spam trade has foiled most efforts to bring it under control.
A growing number of so-called bulletproof Web host services such as Gillespie's offer spam-friendly merchants access to stable offshore computer servers where they can park their Web sites, with the promise that they will not be shut down because of spam complaints.
Some bulk e-mailers have also teamed with writers of viruses to steal lists of working e-mail addresses and quietly hijack the personal computers of millions of unwitting Internet users, creating the "zombie networks" that now serve, according to some specialists, as the de facto circulatory system for spam.
"We've thrown everything but the kitchen sink at this problem," said Chris Smith, the senior director of product marketing for Postini, a company that filters e-mail for corporations. "And yet, all of these efforts have yet to make a significant dent."
Smith was speaking in a conference call with reporters last week to discuss Postini's 2005 e-mail security report, which echoed the bleak findings of recent academic surveys and statistics from other vendors who filter and monitor e-mail traffic.
A survey from Stanford University in December showed that a typical Internet user now spends about 10 working days a year dealing with incoming spam.
Industry analysts estimate that the global cost of spam to businesses in 2005, in terms of lost productivity and network maintenance, will be about $50 billion -- $17 billion in the United States alone.
And the Postini report concluded that most legislative measures -- in the United States, Europe and Australia -- have had little effect on the problem.
The American law requires solicitations to be identified as such in the subject line and prohibits the use of fake return addresses, among other restrictions.
But the real soft spot in the American law, critics have argued, is that it puts a burden on recipients to choose to be removed from an e-mailers list -- an "opt out" feature that bulk mailer is obligated by the law to provide. (The European and Australian systems require bulk mailers, in most cases, to receive "opt in" authorization from recipients.)
Although a law-abiding bulk mailer under the American law might remove a person from its list, critics say, the scofflaw spammer simply takes an opt-out message as verification that the e-mail address is current and has a live person behind it.
"Any spammer worth his salt is not going to follow Can Spam," said Scott Petry, Postini's founder and senior vice president for products and engineering, "because it would be filtered out immediately."
Defenders of the Can Spam Act say blaming the law is far too simple.
"Most people say it's a miserable failure," said Anne Mitchell, who helped draft the legislation and is the chief executive of the Institute for Spam and Internet Public Policy, a research group. "But I see it as a lawyer would see it. To think that law enforcement agencies can make spam stop right away is silly. There's no such thing as an instant fix in the law."
She and others note that filtering software has become particularly adept at catching a vast majority of spam before it ever gets to a user's in box. Legitimate e-mails do sometimes get caught in such nets -- a drawback that generates its own chorus of complaints.
But some specialists have also suggested that the overall success of identifying and weeding out junk e-mail from consumers' in boxes may actually help explain the current surge in spam.
"The more effective the filtering technology," Mitchell said, "the more spam they have to send to get the same dollar rate of return."