MySpace Wins $6 Million From 'Spam King' Richter
Specifically, an arbitrator decided Friday that Richter and his company, Media Breakaway, was to fork over $4.8 million in fines and a $1.2 million in legal fees to MySpace for the case that originated in January 2007.
MySpace contended that Richter's company was responsible for sending out unsolicited e-mails to thousands of MySpace contacts obtained through phishing attacks. The spam, which promoted a Website called consumerpromotionscenter.com, tricked users into believing that they were receiving e-mails from friends on their contact list, MySpace claimed.
The social networking site filed a lawsuit against Richter in January 2007 under California's CAN SPAM Act, demanding damages to the tune of $100 per e-mail, which would have resulted in an award in the hundreds of millions of dollars.
"MySpace has zero tolerance for illegal activity on our site and is committed to bringing to justice those who try to harm our members," said Hemanshu Nigam, chief security officer for MySpace, in a written statement. "Recently, MySpace won a major victory against Scott Richter and Media Breakaway under the Federal CAN SPAM Act. This award reflects MySpace's continued momentum and holistic approach to ridding the site of spammers and phishers through technological innovation, education, partnerships and enforcement. We will continue to do our part in cleansing the Internet of this invasive onslaught of spam."
Media Breakaway did not say in its statement that it would appeal the judgment. Rather, the media company said that it was to be held responsible for the numerous unsolicited e-mails it distributed to MySpace subscribers, but denied responsibility for "certain affiliates who violated Media Breakaway's own affiliate terms and conditions."
"We respect the Arbitrator's findings regarding violations of MySpace's Terms of Use by certain rogue affiliates, particularly during 2006 when the concept of social networks was still developing. We acknowledged early on in this process that our company should not profit from the sending of unsolicited commercial bulletins to MySpace users and offered to return any such profit to MySpace, and we repeatedly offered to work with MySpace to resolve mutual concerns," said Steven Richter, president and general counsel for Media Breakaway, and Scott Richter's father.
Media Breakaway also noted in its statement that the final decision resulted in an award that was 95 percent less than what MySpace initially demanded from Richter. The ruling, however, was a paltry sum compared to a recent judgment lat month against Sanford Wallace and his business partner Walter Rines, who were required to hand over $230 million to MySpace for duping numerous subscribers out of millions of dollars with phishing e-mails that violated the CAN SPAM Act.
Richter has been penalized for illegal spamming activity in the past. Richter's previous company, OptIn RealBig.com was forced to declare bankruptcy in 2005 when Microsoft filed a $50 million against the company. The lawsuit was settled in 2006 for $7 million.