Microsoft Settles with 'Spam King'

Microsoft on Tuesday said it had reached a settlement agreement with Scott Richter, more commonly known as the "Spam King." As part of the agreement, Richter and his company, OptInRealBig.com, will pay over $7 million in damages to Microsoft and have agreed to change their mailing practices.

In 2003, Richter was sued by New York Attorney General Elliott Spitzer, who at the time said that within a two-month period special e-mail addresses set up to catch spam received over 8,000 messages containing over 40,000 fraudulent statements. Spitzer called Richter one of the three biggest spammers in the world at that time.

The settlement is conditioned on the promise that Richter would rescind his motions to file for bankruptcy in a U.S. Bankruptcy Court in Denver. The company said in a joint statement with Microsoft that it would file the motion to dismiss on Tuesday.

"This settlement is a victory for consumers who rely on the Internet because it also means fewer unwanted e-mails in your inbox," Brad Smith, Microsoft General Counsel said in an open letter. "Richter has agreed to send e-mail only to those who have requested it, complying fully with all federal and state anti-spam laws. Before changing his practices, Richter sent, and assisted others in sending, more than 38 billion e-mails a year."

Of the settlement money received by Microsoft, $5 million will be reinvested into the fight against spam, including research and development. As a token of appreciation to the state of New York for it's help in the case, Microsoft will donate $1 million to fund computer access for the poor at community centers statewide.

In a statement, Richter assured that he would follow federal and state spam laws from here on out. "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," Mr. Richter said.

In July, OptInRealBig was removed from a list of known spam operators in anticipation of Tuesday's settlement. Richter's company has also agreed to three years of oversight to ensure compliance.