Are spam laws so bad?

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Poor Hormel foods. Who will pay for it's loss of goodwill??Not surprisingly timed to coincide with the introduction in the Senate of the “CAN-SPAM Act” (yes, that’s another cute acronym for a law: “Controlling the Assault of Non-Solicited Pornography and Marketing Act”), America Online filed a series of lawsuits in federal court earlier this week seeking injunctions and damages from spammers. These spammers were reported to AOL by their members using the new “Report Spam” feature in AOL 8.0. So is this a good thing?

First let’s say what these suits are not. They’re not breach of contract actions. That is, AOL is not suing its own members who violated the terms of their service agreement. It’ suing people with whom they have no privity and who merely sent AOL’s members some unwanted e-mail. So this isn’t completely a market solution.

What these suits are–and it’s amazing all the tech media have missed the boat on this–are trespass to chattels actions like Intel v. Hamidi, which is due for a decision from the California Supreme Court any day now. Trespass to chattels pretty much says: You e-mailed my system one billion unsolicited messages. That cost me $1 million to process, store, evade, delete, etc. That’s actual physical damage. Pay up and don’t do it again.

This is a very novel application of a very old doctrine with probably more cons than pros. This is fascinating, bleeding edge stuff and we’ll find out from Intel soon whether it’ll hold water. (I’ve previously written about it here. The best paper on the subject is Dan Burk’s “The Trouble With Trespass” [PDF].)

But what I want to focus on here are the other causes of action AOL uses. Besides trespass, AOL is suing under the Virginia Computer Crimes Act, the Federal Computer Fraud and Abuse Act, and the Washington Commercial Electronic Mail Act. My question is, are these laws so bad?

Now, I haven’t read them, but assuming all they do is ban unsolicited bulk e-mail, I’m not sure I would have a problem with that. The reason is that, unlike physical junk mail, there is a substantial cost to recipients of spam. By no means is spam going to clog the pipes and be the undoing of the Net as some have claimed, but the cost is there. The question then is whether it’s efficient for recipients to bear this cost.

We certainly think that with regular junk mail, it’s efficient to impose some of the cost on recipients (they have to toss mail they don’t want and opt-out of mailing lists they don’t want to be in). We don’t just ban it. This is because most people find junk mail useful and informative–at least more so than the cost of having to chuck most of it out every day. Our old friend the Coase Theorem says that when you can have two possible states of the world (opt-in or opt-out, allow or ban spam), you take the one with the lower transactions cost. Unlike junk mail, the cost to recipients of spam is more than any benefits. And the reason for this is likely that unlike junk mail, it costs spammers almost nothing to send their e-mails.

Something else I don’t have a problem with, the FTC sued a guy today for sending out porn spam with subject lines like, “What is wrong?” and “Fwd: You may want to reboot your computer.” This is fraud. And although I’d rather have private suits leading the way, I think the spammer deserves it.

The problem, of course, is that laws never just do something as simple as ban spam; they always do more. Although I realize that any ban ultimately has the force of the state behind it, I’m not sure how comfortable I am with criminal provisions like those in the proposed CAN-SPAM Act that would send spammers to jail for a year for including misleading header information in their e-mails.

I also don’t think that because it may be justified, laws are ever going to be the best way to get rid of spam. Again, it’s very easy and inexpensive to send spam, so suits aren’t going to stop all spammers. Luckily I’ve found a market solution that stops all–I mean all–spam I get. I never see any thanks to SpamNet for Outlook by Cloudmark.

Apr 18, 2003 | Comments

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