Microsoft settles with 'spam king' for $7M

IDG News Service - Microsoft Corp. settled a lawsuit that it filed two years ago against the self-proclaimed "king of spam," Scott Richter, who at one time helped distribute more than 38 billion unsolicited e-mails per year, Microsoft said today.
Richter and his online marketing company, OptInRealBig.com LLC, agreed to pay Microsoft $7 million to settle the suit, which was filed in December 2003, Microsoft and Richter said in a joint statement.
Richter and his affiliates have also agreed to comply with federal antispam laws and to stop sending spam to anyone who does not opt in to receive marketing e-mails, according to the statement.
The settlement depends on the dismissal of bankruptcy cases filed by Richter and his company earlier this year. Richter and OptInBig plan to file for dismissal of those cases later today.
After refunding its legal costs, Microsoft will pump $5 million of the settlement money back into fighting Internet crime by providing technical training and forensic assistance to law enforcement staff and developing new technology tools, it said. A further $1 million will provide computers for poor children at community centers in New York state.
Helped by Microsoft, New York Attorney General Eliot Spitzer also sued Richter over spam offenses in December 2003. Spitzer settled that case with Richter last July for $50,000 (See "N.Y. AG settles with self-described 'spam king'").
Microsoft's case, brought in Washington state, accused Richter of sending mass e-mails with misleading subject lines and forged sender addresses in violation of state and federal law. Before mending his ways he sent, or helped others to send, 38 billion unwanted e-mails per year, Microsoft said.
Richter freely admitted to sending large volumes of unsolicited e-mail and cheerfully embraced the title of "spam king." But he denied breaking any laws, saying his company operated within U.S. regulations including last year's CAN-SPAM (Controlling the Assault of Non-Solicited Pornography and Marketing) Act.
As part of Microsoft's settlement, Westminster, Colo.-based OptInBig.com has agreed to three years of oversight.
The case shows that strong partnerships between government and the private sector are vital for fighting spam and other Internet problems, Brad Smith, Microsoft's general counsel, said in a statement..
"This one legal victory will not end spam, but it is a relief to know that the magnitude of spam attacks need no longer be measured on this particular Richter scale," he said.