MySpace wins major spam judgmentIf the law can ever find him, the spam king owes $223 million (according to an amended court order) to the popular social networking site MySpace.
In a ruling that has already been labeled a landmark, a federal judge levied the fine against the so-called spam king, Sanford Wallace, and his associate Walter Rines, for their spam operation which sent junk messages to MySpace members. The award is believed to be the largest anti-spam award ever. However, the defendants never bothered to show up in court and have no known address.
However, the impact of the ruling, even if the fine is never paid, may give spammers second thoughts, said Hemanshu "Hemu" Nigam, chief security officer for News Corp.'s Fox Interactive Media (FIM), where he oversees all safety, security, education, privacy and law enforcement programs for MySpace and other FIM properties. Nigam also oversees the development of safety and security features and enhancements on MySpace.
"The bottom line is MySpace declared war on spam," he told SCMagazineUS.com on Wednesday.
Peter Cassidy, secretary general of the Anti-Phishing Working Group (APWG), a self-described global pan-industrial and law enforcement association focused on eliminating fraud and identity theft resulting from phishing, pharming and email spoofing of all types, told SCMagazineUS on Wednesday that the case points to one thing: if you're a spammer making money it's going to attract the attention of the law.
"If you're operating a spam operation and become large and successful, you become a target for suits," said Cassidy.
Cassidy believes that over time security teams will look at operation like these and figure out who is behind it, and then look up relevant law to see if they can go after the perpetrators.
"The message is clear," he said, "you can't do it in the U.S."
While Cassidy conceded that this ruling will not stop spam overnight, he pointed out that the ruling does send a message that it is now more difficult for the bad guys to operate within the U.S.
Spam king Wallace has been in the news several times for his spam operation, which is said to have delivered 30 million junk emails a day in the 1990s. The MySpace ruling is not the first judgment against him. In May 2006, Wallace was fined $4.1 million, also by a federal court. And he has previously been sued by the Federal Trade Commission, AOL and Concentric Network.
MySpace filed its suit in March 2007, alleging that Wallace launched a phishing scam to fraudulently access MySpace member profiles. He was also cited for sending over 700,000 spam messages with ads to MySpace users attempting to lure them to his websites to gain click throughs.
Under the federal anti-spam law, known as the CAN-SPAM Act of 2003 (Controlling the Assault of Non-Solicited Pornography and Marketing Act), each violation entitles MySpace to $100 in damages, tripled when conducted willfully and knowingly, according to an AP report.
U.S. District Judge Audrey Collins in Los Angeles awarded $157.4 million jointly against Rines and Wallace, and an additional $63.4 million against Rines under the CAN-SPAM Act. There was an additional fine of $1.5 million against the two under California's Anti-Phishing Act of 2005.
"The judge said this is serious and she issued a serious judgment," MySpace's Nigam said.
For his part, Nigam said that MySpace's effort in combatting spam was multi-pronged, including education of users and enforcement.
The education part involved teaming with the Federal Trade Commision (FTC) to run anti-phishing videos on myspacetv.com. The clips have gotten 685,000 hits so far, said Nigam. MySpace is continuing its relationship with the FTC, he adds.
Increasing awareness on the site is also a key element of MySpace's campaign. It's important to let users know when they are leaving the MySpace site via a link, Nigam said.
As for enforcement, MySpace has seen a lot of success because it's brought in a team of individuals with prior law enforcement experience, he pointed out. Nigam himself brings more than 18 years of experience in both private industry and law enforcement fields, including serving as a federal prosecutor against internet child exploitation and computer crime for the U.S. Department of Justice.
"Over the decades, society will organize its laws and decide spam is an abuse of the enterprise," APWG's Cassidy said.