America Online, EarthLink, Microsoft and Yahoo! Team Up To File First Major Industry Lawsuits Under New Federal Anti-Spam Law
March 10, 2004
Founding Members of the Industry's Anti-Spam Coalition Form United Front Against Spammers On Behalf of Online Consumers

WASHINGTON, D.C., March 10, 2004 — America Online Inc. (NYSE: TWX), EarthLink Inc. (Nasdaq: ELNK), Microsoft Corp. (Nasdaq: MSFT) and Yahoo! Inc. (Nasdaq: YHOO) today jointly announced that their collaborative anti-spam industry efforts have resulted in the coordinated filing of the first major industry lawsuits under the new federal anti-spam law, the Controlling the Assault of Non-Solicited Pornography and Marketing (CAN-SPAM) Act of 2003, which went into effect Jan. 1.

The country's four leading e-mail and Internet service providers announced the combined filing of six lawsuits against hundreds of defendants, including some of the nation's most notorious large-scale spammers. The lawsuits were announced by senior executives of the companies at a joint press conference at the St. Regis Hotel in Washington.

New Federal Anti-Spam Law

The CAN-SPAM law provides strong new enforcement tools for e-mail and Internet service providers and law enforcement, and criminalizes specific tactics spammers use to spread junk e-mail. The law, which was supported by the four companies, allows for harsh new penalties against large-scale spammers that use fraud, deceit and evasion to try to send junk e-mail to consumers.

Each of the four companies last night filed legal complaints in federal courts in California, Georgia, Virginia and Washington state. The complaints charge the defendants with sending a combined total of hundreds of millions of bulk spam e-mail messages to customers of the four networks. Some of the common allegations described in the complaints include these:

  • Deceptive solicitations for a variety of products including get-rich-quick schemes, prescription drugs, pornography, instructions for conducting spam campaigns, banned CDs, mortgage loans, university diplomas, cable descramblers and other common types of unsolicited e-mail

  • Use of open proxies (sending spam through third-party computers to disguise their point of origin)

  • Falsified "from" e-mail addresses (spoofing)

  • Absence of a physical address in the e-mail

  • Absence of an electronic unsubscribe option

Each allegation is a direct violation of the CAN-SPAM law. A summary of each filing is included below. More detailed information about each case can be found on each complainant's Web site.

Comments

"Today is a red-letter day for big-time spammers, and the letters they should remember from this day forward are 'CAN- SPAM,'" said AOL Executive Vice President and General Counsel Randall Boe. "Congress gave us the necessary tools to pursue spammers with stiff penalties, and we in the industry didn't waste a moment -- moving with speed and resolve to take advantage of the new law. Consumers should take note that the new law not only empowered us to help can the spam, but also to can the spammers as well -- and we'll do that, one spam kingpin at a time if necessary. Our actions today clearly demonstrate that CAN-SPAM is alive and kicking -- and we're using it to give hard-core, outlaw spammers the boot."

"Today's bold action represents a decisive step by the leaders in our industry to preserve the integrity of the Internet and restore the value of e-mail that spammers have threatened to undermine," said EarthLink Vice President, Chief Privacy Officer and Assistant General Counsel Les Seagraves. "Together, we are using a tough new federal law, combined with existing state laws, to let criminal spammers know that the nation's leading Internet providers are united by a common goal: stopping the flow of illegal and intrusive junk e-mail and strengthening the Internet experience for all users. Collectively, we are committed to sending spammers the message that we will find them and use the full force of the law to stop them."

"Substantial building blocks have been put into place in the effort to contain spam," said Microsoft Deputy General Counsel Nancy Anderson. "With the creation of this anti-spam industry alliance and the implementation of a federal law to litigate effectively against spammers, we are witnessing the impact that this industrywide attack on spam is having. We've had the opportunity to share investigative best practices and various legal resources and information to ensure that spammers are going to have an increasingly difficult time continuing their deceptive practices with the full force of this industry coming down on them."

"We're holding spammers directly accountable for the relentless infiltration of people's inboxes. We're acting on behalf of the millions of people who are saying 'enough is enough,'" said Yahoo! Senior Vice President and General Counsel Mike Callahan. "With federal legal remedies and industry collaboration, we have a significant new advantage. We are leveraging new legal tools and sharing best practices, sending a signal to spammers that they are facing a more unified front than ever before. This is great news for all consumers."

The Industry Anti-Spam Alliance

The four companies formed an anti-spam alliance in April 2003. Coalition members meet regularly to proactively address the spam problem that threatens the effectiveness of e-mail as an essential means of communication. Through ongoing industry collaboration with a number of telecommunications companies and industry partners, the group expects to make consistent progress in the areas of technical standards development, as well as improved enforcement techniques and litigation.

Beyond today's major enforcement efforts, the anti-spam industry alliance is making progress on issues related to new and promising technical Internet standards, specifically regarding the certification and authentication of e-mail.

Spam continues to drain time, resources and network space from online companies and inhibit the online experience of consumers across the medium. Spam remains the chief concern of these four companies and their customers.

Today's announcement is the result of substantial corporate cooperation. By sharing information, resources and investigative best practices within this industry alliance, these companies have been able to identify high-volume outlaw spammers for civil lawsuits -- a first and critical stage in the campaign to end unwanted junk e-mail through stepped-up and coordinated civil enforcement programs.

The companies believe that the issue of spam can only be significantly addressed and resolved through a comprehensive, multilayered approach that includes anti-spam technologies, consumer education and awareness, legal enforcement, self-policing of e-mail account abuse, and stronger partnerships between industry and government and other regulatory agencies.

About America Online

America Online Inc. is a wholly owned subsidiary of Time Warner Inc. (NYSE: TWX). Based in Dulles, Virginia, America Online is the world's leader in interactive services, Web brands, Internet technologies and e-commerce services.

About EarthLink

"EarthLink revolves around you (TM) ." Celebrating ten years as a leading national Internet service provider (ISP), Atlanta-based EarthLink has earned an award-winning reputation for outstanding customer service and its suite of online products and services. According to the J.D. Power and Associates 2003 Internet Service Provider Residential Customer Satisfaction StudySM, EarthLink is ranked highest in customer satisfaction among high-speed ISPs. Serving more than five million subscribers, EarthLink offers what every user should expect from their Internet experience: high-quality connectivity, minimal drop-offs and ISP-generated intrusions, and customizable features. Whether it's dial-up, high-speed, Web hosting, or wireless Internet service, EarthLink provides the tools that best let individuals use and enjoy the Internet on their own terms. Learn more about EarthLink by calling (800) EARTHLINK or visiting EarthLink's Web site at http://www.earthlink.net/ .

About Yahoo!

Yahoo! Inc. is a leading provider of comprehensive online products and services to consumers and businesses worldwide. Yahoo! is the No. 1 Internet brand globally and the most trafficked Internet destination worldwide. Headquartered in Sunnyvale, Calif., Yahoo!'s global network includes 25 world properties and is available in 13 languages.

Microsoft is a registered trademark of Microsoft Corp. in the United States and/or other countries.

America Online is a registered trademark of Time Warner.

Earthlink and the EarthLink logo are registered trademarks of EarthLink Inc.

Yahoo! and the Yahoo! logo are trademarks and/or registered trademarks of Yahoo! Inc.

The names of actual companies and products mentioned herein may be the trademarks of their respective owners.

Case Summaries

America Online

AOL v. Davis Wolfgang Hawke, et al.

Davis Wolfgang Hawke (also known as Dave Bridger), Braden Bournival and unknown John Doe defendant co-conspirators are alleged to have transmitted millions of spam e-mail messages directing AOL members to Web sites selling "Pinacle" penis enlargement pills, weight loss supplements, handheld devices advertised as "personal lie detectors" and a product labeled "the Banned CD." These spam messages were transmitted between July 1, 2003, and the present. The complaint alleges that AOL has tallied at least 100,000 member complaints about messages advertising these products. In addition, the complaint alleges that Hawke also offered to provide or sell a number of illegal spam-related goods and services under the apparently fictitious name "Dave Bridger," including these:

  • Providing "250 free proxies every day to [Hawke's] affiliates" and offering to "pay them $20 per sale for Pinacle, an herbal penis enlarger"

  • Offering "bulk-friendly hosting" on servers located in China, Latin America or other foreign countries, so mailers could "point your domains to our server if it helps you get into specific domains like AOL"

  • Selling millions of AOL addresses, and "cracked" bulk mailer programs

AOL v. John Does 1--40

AOL's complaint alleges that from at least November 2003 to the present, unknown John Doe defendants have transmitted millions of spam messages to AOL members advertising numerous Web sites selling a variety of products, including mortgage leads, adult-content Web sites and business opportunities. The messages are transmitted through fraudulent means to make it difficult to determine the identity of those responsible, and contain misleading subject lines, including the completely false claim in some that the spam message is an "important message from AOL." The John Doe Defendants also used other deceptive tactics in an attempt to evade AOL's spam filters, including random text in the body of their messages. AOL has already tied more than half a million member complaints to these defendants (and is still counting complaints attributable to them). On some days, complaints about these spammers constituted as many as 10 percent of all AOL member complaints about spam.

EarthLink

EarthLink v. John Does 1--25 (The "Prescription Drug Spammers"); John Does 26--35 (The "Mortgage Lead Spammers"); John Does 36--45 (The "Cable Descrambler Spammers"); John Does 46--55 (The "University Diploma Spammers"); John Does 56--65 (The "Get Rich Quick Spammers"); and John Does 66--75 (other spammers)

Since Jan. 1, John Doe defendants 1--75 have been responsible for a substantial portion of the incoming spam on EarthLink's network, sending millions of spam e-mail messages to advertise Web sites selling prescription drugs, mortgage leads, cable descramblers, university diplomas and get-rich-quick schemes. The defendants have hidden their identities with false domain-name registration information, falsified headers, fake "from" lines and misleading subject lines, violating the federal CAN-SPAM Act, EarthLink's Acceptable Use Policy and other state and federal laws. Some of the defendants have used text randomizers to insert long passages of gibberish in messages in attempts to evade EarthLink's spam filters.

Fingerprint phrases and sample subject lines include "Enjoy deep discount meds here," "G_eneric via-gra 60% cheap*r cowslip," "promote someone else's online business and cash in big," "make over $1000 per day" and "attention single mothers."

Microsoft

Microsoft Corp. v. JDO Media Inc., a Florida corporation, and John Does 1--50 (U.S. District Court, Western District of Washington)

This lawsuit charges JDO Media Inc. ("JDO"), a Florida company, and other unknown defendants with operating an automated multilevel marketing program that is advertised through spam, and that instructs its members on how to generate leads for the program, or for other products, through spam. The lawsuit alleges that Microsoft Hotmail® subscribers have been barraged by millions of illegal e-mail messages touting this program.

The lawsuit alleges that the spam used to promote the program is intentionally routed through open proxies, contains header information that is false and misleading, and uses other deceptive methods to disguise the senders' identities. This lawsuit also charges that the e-mail advertising for the program contains misleading subject lines such as "This is your lucky day," "Elite, Professional Invitation," and "Warning!!! These three minutes could change your life." Many of these e-mail messages are sent with "high priority." These deficiencies are all alleged to be in violation of the federal CAN-SPAM Act.

Alleged CAN-SPAM Violations

  • Falsified "from" e-mail addresses and transmission paths

  • Use of open proxies

  • Deceptive subject lines

  • No physical address on some e-mail messages

Microsoft Corp. v. John Does 1--50, doing business as Super Viagra Group (U.S. District Court, Western District of Washington)

This lawsuit alleges that Super Viagra Group has sent to Microsoft Hotmail subscribers hundreds of millions of illegal e-mail messages advertising either "Super Viagra" or a weight-loss patch. The e-mail practices of this spam group are sophisticated, and are alleged to be in violation of the federal CAN-SPAM Act and other state and federal laws.

The lawsuit contends that Super Viagra Group routes its e-mail messages through open proxies and hijacked computers in countries around the world, uses misleading transmission information and subject lines, and takes other actions to disguise the senders' identities. The lawsuit identifies nearly 40 domain names through which, allegedly, the Super Viagra Group's products can be purchased. The identified domains are registered to individuals in Argentina, India, Lithuania, Russia, South Africa, South Korea and Turkey.

Alleged CAN-SPAM Violations

  • Open proxies for some or all e-mail messages

  • Falsified "from" e-mail addresses on most or all e-mail messages

  • Deceptive subject lines on some e-mail messages

  • No physical address on most e-mail messages

  • No electronic unsubscribe option on some e-mail messages

Yahoo! Inc.

Yahoo! Inc. v. Eric Head, Matthew Head and Barry Head, and their companies Gold Disk Canada, Inc., Head Programming, Inc., and Infinite Technologies Worldwide, Inc., collectively known as "The Head Operation"

Alleged Spam Activity:

Defendants were on Yahoo! Mail's "Most Wanted" spammer list for allegedly sending millions of spam messages. In January 2004, Yahoo! Mail received approximately 94 million total e-mail messages from The Head Operation.

  • Disguised identity. Open proxies from countries all over the world were used to disguise the origin of the messages.

  • Unsolicited commercial messages. Messages consisted of solicitations for life insurance, mortgage and debt consolidation, and travel services.

  • Deceptive subject lines. Messages included misleading subject lines, including "past due account."

  • Sold personal data. Defendants allegedly collected personal information, such as the names and e-mail addresses of Yahoo! Mail users who responded to the defendants' spam solicitations, and sold the information as "leads" to marketers.

  • False domains. The domain names for the Web sites promoted in the messages were falsely registered to individuals with physical addresses in China.

  • Font Tricks: The defendants used color font tricks to hide randomized text in an attempt to circumvent the SpamGuard filter.

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