Sunday, June 29, 2003

Microsoft Chairman Bill Gates last week called spam a “spreading plague,” but the world’s largest software maker has lobbied routinely against the toughest anti-spam legislation.

Some consumer groups said the Redmond, Wash., company is more interested in profiting from spam than stopping it.

Anti-spam groups said Microsoft has supported legislation that would legitimize spam as a marketing practice because it stands to profit from businesses that use e-mail to sell products. These groups also note that Microsoft profits from the deluge of spam by selling spam filters and extra e-mail storage.

“The notion that Microsoft is beating the drum for anti-spam is utterly fallacious,” said David Kramer, a Palo Alto, Calif., lawyer who has helped craft anti-spam legislation.

About 40 percent of all e-mail is unsolicited, costing businesses as much as $10 billion a year in anti-spam services and lost productivity, the Federal Trade Commission says.

The Wall Street Journal published a letter June 23 from Mr. Gates, Microsoft’s co-founder, titled “Why I Hate Spam.” In it, he outlined efforts to partner with Yahoo, Earthlink and America Online to reduce spam, and to push for legislation and technology that would make it harder for spammers to use deceptive practices.

Microsoft posted a similar letter from Mr. Gates on its Web site Tuesday, a week after the company said it filed 13 lawsuits against spammers for deception and fraud.

Spam opponents called Mr. Gates’ letters disingenuous and self-serving.

Mr. Kramer said the letter was part of a “cynical PR campaign” designed to increase sales of Microsoft anti-spam products.

Microsoft, the world’s largest software maker and owner of the MSN Internet provider and Hotmail free e-mail service, charges up to $299 per year for a product that allows businesses to send 10,000 e-mails per month. It also charges $9.95 for a software package that includes spam filters, parental controls and other features, and sells extra e-mail storage space for $19.95 per year.

Microsoft has insisted its e-mail marketing products are designed for legitimate businesses with established customers.

But the company has fought legislation in Missouri, Michigan and California that would make it illegal to send commercial e-mail to anyone who doesn’t want it. Microsoft instead has supported laws that allow companies to send unsolicited e-mail, provided that they do not use deceptive or fraudulent practices and offer consumers the chance to opt out of future solicitations.

Microsoft, in a copy of “model legislation” provided to The Washington Times, said “legislators should encourage [Internet service providers] to self-police the Internet through software filtering tools” and that providers should be freed of any liability if spammers use their networks. The company forwarded background information on the type of legislation it had supported, but did not provide a representative to comment on legislation in specific states, or on accusations from anti-spam groups.

Lawmakers blame Microsoft’s powerful lobby for persuading colleagues to drop the strictest anti-spam provisions from some bills, or oppose them outright.

In Missouri, the House voted in favor of a law to create a state “no spam” registry similar to the do-not-call lists designed to fend off telemarketers. But in a last-minute decision, the state Senate last month rejected the bill at the urging of Microsoft, those close to the process said. The Missouri Senate then passed an anti-spam bill, without a provision for a registry.

Missouri Attorney General Jay Nixon said Microsoft was almost single-handedly responsible for blocking the “no spam” registry.

“They sent every lobbyist they could find to kill the bill,” Mr. Nixon said.

Michigan’s Senate passed a bill Tuesday that would create a “no spam” registry, but the House had no plans to follow suit, said staffers of the bill’s sponsor, Republican state Sen. Mike Bishop. Microsoft has spoken out against the bill, arguing that a registry would be technologically impractical and unenforceable.

Supporters of the bill said technical issues still had to be resolved but that a registry would be more effective in decreasing spam than current law.

“We jokingly refer to [Microsofts] efforts here to be the ‘axis of inertia,’” said Dennis Darnoi, a senior adviser to Mr. Bishop.

Unlike many anti-spam groups, Microsoft has drawn a line between deceptive and offensive spammers and legitimate businesses that use unsolicited e-mail as a marketing tool. Microsoft’s suggestions for anti-spam legislation do not call for a ban, but simply that any unsolicited e-mail contain an “ADV” label to indicate it is an advertisement.

This stance is at odds with a bill proposed by California state Sen. Debra Bowen, a Democrat, calling for a total ban on spam. Her proposal is inspired by the state’s “junk fax” law, which makes it illegal for businesses to send a marketing fax to anyone with whom they don’t have an existing relationship.

Microsoft successfully lobbied the California Assembly to delay a vote on Miss Bowen’s bill last week.

“Microsoft is the primary obstacle to getting tough anti-spam legislation passed in California,” Miss Bowen said.

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