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Lawsuits drive 'Spam King' Richter to bankruptcy

Brought to knees by MS and Spitzer

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The received wisdom in libertarian circles is that email anti-spam laws don't work, so they're not worth trying. In fact, they're working so well that the notorious 'Spam King' Scott Richter has filed for bankruptcy.

Last Friday, Richter's OptInRealBig.com filed for bankruptcy, brought to the brink by lawsuits from New York Attorney General and consumer champion Eliot Spitzer and Microsoft. OptInRealBig.com claimed assets of less than $10 million and liabilities of over $50 million thanks to the legal onslaught from Redmond, and Spitzer the Blitzer, which began in December 2003. Both sued under local state antispam laws. Although Richter settled with the NY AG's office last year, he says that Microsoft's claims top $19 million, and have forced him into insolvency.

It's a rare example of Microsoft deploying its legal muscle to socially beneficial ends.

But why, asks a reader, has the MSM [mainstream media] ignored this story? Probably because after a decade of libertarian propaganda, a kind of weary fatalism has set in. There are two strands of idealism that present an obstacle to fixing our broken internet email system, and this is one of them. The other is the belief that enacting technical changes would violate the "end to end principle" on which the open internet was founded, back in a more innocent day, when its only users were expected to be students and scientists.

Internet email is now so broken that Suzanne Sluizer, the author of MTP, SMTP protocol's immediate predecessor, told CNET two years ago, "I would suggest they just just write a new protocol from the beginning."

So the internet lobby insists that the law can't be made to work, and seeks to define the range of technical fixes to a very narrow range of politically-correct options.

Both are high-minded principles, but are means, not ends in themselves. A purely open network will be abused because spammers are behaving as rational economic actors: spamming exists because it's worth doing. In short, it pays. But as the Richter example shows, a local legal remedy can help.

Spam may never die on open networks, but a global consensus for legal and technical remedies will go a long way to stamping it out. Richter's bankruptcy shows that one part of the solution can be effective, it needs to be taken globally. The technical consensus, for now, remains elusive, but the lobby needs to take it much more seriously.

Every day billions of people use both closed and private computer networks, such as text messaging, and open computer networks, such as the internet, to communicate. Spam isn't a problem on the closed networks. To the question "What price freedom?" we can pose the counter-question, "What price reliability?"

Internet email is now so broken that only the way to be sure a recipient actually received your email is to call them and verbally confirm that they got it. If the public is to choose between spam and reliable messaging, which one do you think it will choose?

The internet lobby has a simple, and fairly stark choice ahead of it: fix messaging, or become irrelevant. ®

Related stories

Open relay spam is dying out
Internet is dying Prof. Lessig
Microsoft declares war on spam
Online extortion works
Spam King dodges $20m big stick
Penis pill peddler stiffs AOL spam insider
'Spam King' Richter get legal roasting

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