MySpace's big spam win: Will it really be a deterrent?

MySpace won statutory damages of more than $230 million against spammers Stanford Wallace and Walter Rines, but the big question is whether this ruling--delivered in the Federal District Court in Los Angeles--will act as a deterrent.

To be sure, MySpace's win (see court order PDF) has some eye-popping figures (good luck collecting that sum). Wallace and Rines worked together to create MySpace accounts, swipe passwords and then spam users. MySpace reckons that the duo sent as many as 735,925 messages. The award is the largest under the CAN-SPAM Act.

Hemanshu Nigam, MySpace's chief security officer, said in a statement:

“MySpace has zero tolerance for those who attempt to act illegally on our site.  The Federal District Court in Los Angeles awarded MySpace $233,777,500 under the federal CAN-SPAM Act and $1,500,000 under the California anti-phishing statute. User engagement is up 32 percent year over year while spam is significantly decreasing, proving efforts like this are working.  We thank the court for serving justice upon defendants Wallace and Rines and we remain committed to punishing those who violate the law and try to harm our members.”

The hope here is that this big award will act as a deterrent. However, that's unclear. Wallace and Rines obviously aren't taking the matter seriously. Both failed to show up for the court hearing. Meanwhile, Wallace, known as the Spam King, led a spam outfit called Cyber Promotions. He has lost lawsuits to ISPs and has wound up in a spyware case that led to a $4 million federal judgment against him in 2006, according to the Associated Press. Wallace has seen injunctions before yet the spam keeps coming.

Add it up and Wallace owes almost a quarter of a billion greenbacks. He doesn't seem to be sweating it much.

This award is a lot like those big NFL contracts with nice round numbers, say $60 million over 5 years. They make for great headlines, but the reality never matches the contract. The problem: Those contracts aren't guaranteed and most players don't collect the whole sum. In other words, MySpace's win makes for a nice headline, but until Wallace either pays up or lands in jail the risk-reward equation remains in his favor.