From The Economist Global Agenda
Microsoft has reached a settlement with one of the world's leading
spammers which includes a payment of $7m to the software
giant. Despite legal and technological challenges, spamming is still
a big problem. And a new form of the scourge could prove even more
costly to the unwary.
FOR overweight lovers of pornography in need of a cheap loan or a
"boost", the offers of slimming pills, Viagra, smut and the like that
flood into e-mail inboxes around the world are a positive boon. For most
consumers and businesses, however, "spam" has grown over the past few
years from a mere nuisance into a costly and time-consuming threat. On
Tuesday August 9th, business fought back. Microsoft's case against Scott
Richter ended in victory for the software giant after the "spam king"
agreed to pay $7m to settle charges relating to a lawsuit filed in 2003
against his internet firm, OptInRealBig.
Microsoft alleged that Mr Richter's firm had sent up to 38 billion
unsolicited commercial e-mails a year, offering anything from loans to
herbal remedies. Once described as the world's leading spammer, Mr.
Richter claims that his firm has since cleaned up its act and now only
sends offers to customers that want them. Microsoft was joined in the
action by Eliot Spitzer, who for once took the side of big business
(albeit in a battle with another, more unpopular business). The software
giant and New York's crusading attorney-general are not alone in wanting
to stamp out spam. Other big technology firms, internet service
providers, affected companies and governments have all taken action of
various kinds against spammers. There are even some suggestions that the
battle against unwanted e-mail is finally being won.
The volume of spam increased alarmingly over much of the past few
years. In 1997, the world's e-mail users could expect on average one
unsolicited spam message a week. By the end of 2000, spam accounted
for some 10% of global e-mail traffic. Steadily that proportion
increased to a high of an astounding 95% in July 2004, according to
MessageLabs, a message-security firm. Since then, the level has fallen
to just below 70%.
But though some may count this as a victory of sorts, spam still
accounts for a greater share of worldwide e-mail traffic than it did
when federal anti-spam regulation was introduced in America-where much
spam originates and is received-some 18 months ago. Despite Bill Gates's
declaration in 2004 that spam would soon be a thing of the past, it is
clearly a vast problem that is not going away.
And it is costly as well as inconvenient and annoying. Ferris
Research, a consulting firm, estimates that spam will cost American
businesses alone $17 billion this year in lost productivity and in
spending on anti-spam measures; sending spam, on the other hand, is
virtually costless. America Online (AOL) says that at any time between
a third and two-thirds of its server capacity is taken up by spam
(though the firm noted a decline in 2004). Some spam messages contain
computer viruses that wreak havoc with the recipients' hard
drives. Others contain scams that cost gullible readers in more
embarrassing ways.
Mr. Richter's case is only the latest in a series of prosecutions that
have led to fines and prison sentences for junk e-mailers in America
and elsewhere. Microsoft has joined forces with AOL, Yahoo! and
EarthLink to bring legal actions against spammers. In the past two
years, Microsoft has filed over 100 lawsuits in America, and either
initiated or supported legal action against spammers in 30 cases
abroad, of which it has won or favourably settled over half. And
sentences for spamming can be stiff. In April, Jeremy Jaynes,
considered among the world's top-ten spammers, got a nine-year prison
sentence in America for using false e-mail addresses and aliases to
send mass e-mails (though the sentence was suspended pending an
appeal).
But spammers are an elusive bunch. Following the introduction of
America's anti-spam CAN-SPAM Act in January 2004, junk e-mailing fell
briefly but then shot up again (see chart). Some spammers, acting
illegally by sending messages via third-party "proxies", simply moved
abroad. Furthermore, the act gave spammers a let-out: its authors,
lobbied hard by legitimate marketing companies, agreed that spamming
could still be deemed legal as long as recipients were able to remove
themselves from mailing lists, and senders did not mislead them about
the origin of the mail. In Europe, too, new measures have been of
limited help. The European Union introduced tougher legislation
shortly before America. This required explicit consent from recipients
before spam could be sent but has proved largely ineffective as a
deterrent.
As a result, internet users have been taking matters into their own
hands using blocking technology, and deterrence methods which are
improving all the time. Around 90% of all spam is caught by filters
these days. But spam still clogs servers, to the chagrin of internet
service providers and IT departments. Internet users then often times
work on that which is left manually, using methods a few other
Internet users claim is 'illegal' or 'unethical'.
Phishing for victims
The recent decline in the amount of spam may just reflect a
realisation on the part of spammers that they need to be more
selective now that filters will trap the most obvious unsolicited
offers. And a troubling development is the increased incidence of
"phishing", a form of fraudulent spamming that can be extremely costly
to victims. Phishers send out millions of e-mails in an attempt to
steal personal and financial-account details from unsuspecting
dupes. These e-mails purport to come from reputable businesses and
contain links to websites where recipients are asked to divulge bank
and credit-card details. The fraudsters can then use this information
to steal cash from their victims. One recent attempt mimicked eBay's
website. Another, similar fraud involves spam e-mails carrying hidden
software that sends details of the recipient's computer use to
criminals, often using key-logging software that notes passwords or
keyed-in bank details.
Despite the modest successes in the war on spam, it is here to
stay. The type of cross-border legal action that is necessary to rope
in spammers is notoriously hard to organise, and jurisdictions that
are willing to turn a blind eye to spammers will be impossible to
police. Technology may yet provide an answer beyond blocking
technology. Microsoft and other big technology firms are currently
tussling over the best standard for authentication technologies that
verify the origins of e-mails and will provide added protection in
the future. They have their work cut out. Old-style spamming may,
perhaps, be coming under control. But for the enterprising miscreant,
spamming-based computer crime is a growth industry.
Copyright 2005 The Economist Newspaper and The Economist Group.
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