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Spammer to Pay Microsoft $7 Million to Settle Lawsuit

Accused spammer Scott Richter agreed to change his business practices and pay Microsoft $7 million to settle a lawsuit the software giant filed against him and his company, OptInRealBig.com LLC, Microsoft and Richter announced Tuesday.

Richter was ranked among the top three spammers in December 2003 when Microsoft and New York State Attorney General Eliot Spitzer filed the lawsuit. Last month, the spam-fighting consumer advocacy organization Spamhaus Project removed Richter from its Register of Known Spam Operators.

The settlement is contingent upon dismissal of bankruptcy cases filed in March by Richter and OptInRealBig in U.S. Bankruptcy Court in Denver. Richter and his company plan to file a motion Tuesday to dismiss the bankruptcy cases.

Richter and four-year-old OptInRealBig have denied the allegations about their business practices in the lawsuit, but the company has agreed to three years of oversight.

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“In response to Microsoft’s and the New York Attorney General’s lawsuits, we made significant changes to OptInRealBig.com’s e-mailing practices and have paid a heavy price,” Richter said in a statement. “I am committed to sending e-mail only to those who have requested it and to complying fully with all federal and state anti-spam laws.”

Microsoft said it will dedicate $6 million of the settlement to computer crime-busting activities and charitable programs. The company plans to put $5 million into expanding Internet safety partnerships with governments and law enforcement agencies around the world. An additional $1 million will be used to help provide broader access to computers in community centers in New York state for underprivileged children and adults.

Microsoft senior vice president and general counsel Brad Smith said that Microsoft will continue to combat spam through a combination of technology, consumer education and enforcement. The company's federal lobbying records show Microsoft spent heavily to influence CAN-SPAM, which affects the behavior of firms like OptInRealBig.

“In addition to pursuing civil lawsuits against spammers, Microsoft will partner with industry, government and law enforcement to tackle spam and other Internet safety threats,” Mr. Smith said.

About the Author

Scott Bekker is editor in chief of Redmond Channel Partner magazine.

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