Counting the cost of spam


29 Jan 2004

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It’s bad enough that spam gives marketing a bad name but worse still is the likelihood that it’s making us lose faith altogether in email, still the single most useful thing the internet has given us.

Who doesn’t secretly dread, first thing in the morning, opening their inbox and having to wade through mountains of junk messages that are at best irrelevant and at worst, offensive? If it’s any comfort — and it probably isn’t — we’re not alone. Last month, Microsoft revealed that the spam scourge is costing it tens of millions of dollars a year in anti-spam personnel, hardware and network bandwidth for its Hotmail service. The company is also blocking spam messages at a rate of 2.4 billion a day.

The software giant said in December that it would file lawsuits against US email marketing companies it alleges are responsible for much of the unsolicited commercial email or spam directed at Hotmail. The announcement followed the filing by New York’s attorney general, Eliot Spitzer, of a civil lawsuit against three companies. Spitzer said he intended to drive the firms out of business by seeking punitively large penalties in court. Outlining similar intentions at a joint press conference, Microsoft said it would be seeking US$18.8m in damages against the companies.

Legal action of this kind may yet shut down some spammers, which is just as well as the early signs are that legislation on the statute books is having little discernible impact on senders. The aptly named (but poorly executed) law, known as CAN-SPAM (Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003) came into effect on 1 January this year in the US, but more than 99pc of a recent sample of unsolicited commercial email failed to comply with the new rules.

MX Logic, a provider of email protection and security systems, took a random sample of more than 1,000 unsolicited commercial emails checked over a seven-day period from New Year’s Day and found just three of these messages complied with the act.

The law allows for certain forms of unsolicited commercial email as long as it is clearly marked as an advertisement and allows consumers to unsubscribe from future unsolicited email from the sender. This goes against the generally accepted practice that it’s unwise to reply to spam in any form, even if it is to tell the sender that we don’t want to receive any more messages, thank you very much.

However, a spokesman for the Data Protection Commissioner in Dublin has pointed out that the legislation doesn’t cover emails sent from the US to Europe. Complaints originating from this side of the Atlantic against spammers based in the US will get short shrift from the authorities there.

The law enforces statutory damages of US$2m for violations, tripled to US$6m for intentional violations, as well as unlimited damages for fraud and abuse. The CAN-SPAM approach imposes fines on spammers after the fact, but a radical proposal from Forrester favours a charge before the mail is sent. The industry analyst believes that the only way to curb spam is to levy a fee for anyone trying to send email in large volumes.

One way or the other, it all comes down to money. The reason spam works is partly the same reason why email is now so successful — it is ridiculously cheap to send. Spammers need only a small percentage of gullible users prepared to click on their links or buy the products they hawk and they are guaranteed a profit. To counter this, Forrester suggests that bulk senders of email should be charged a minimal amount per message, as little as one US cent, that would accrue as mail volumes increase into the thousands and beyond.

“A charge of US$2.50 per thousand messages would add US$2,500 to the cost of a one million-message campaign, seriously undermining spam’s economics in which names are acquired free through harvesting, and sending email costs as little as ten cents per thousand messages,” Forrester says.

Crucially, this proposal doesn’t hurt the everyday user who is rarely likely to come anywhere close to sending emails in the kind of volumes that would cause the payment system to kick in (Forrester suggests a minimum limit of 1,000 emails per month). Legitimate marketing companies, which are probably already accustomed to paying postage fees to send out their wares by snail mail, would be scarcely likely to object to an occasional charge. The same surely goes for any business that wants to keep close to their customers — email is still far cheaper than the postal service and if the level of spam were to decline, then their messages wouldn’t have to shout so loud to be heard above the din.

Forrester’s plan will take some organisation and it won’t be easy, so it will be interesting to chart any developments over the coming year and see who has the stomach for the fight.

By Gordon Smith