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MySpace Wins Verdict Against Alleged Colo. Spammer

Media Breakaway LLC Of Westminster Barraged Members With Unsolicited Advertisements

POSTED: 3:45 pm MDT June 16, 2008
UPDATED: 12:54 pm MDT June 17, 2008

MySpace can take steps to collect $6 million from a notorious Internet marketer for spamming the popular online hangout's users.

Scott Richter and his Web marketing company, Media Breakaway LLC of Westminster, Colo., are being asked to pay MySpace $4.8 million in damages and $1.2 million in attorney's fees for barraging MySpace members with unsolicited advertisements. Media Breakaway and its employees were also banned from the site.

MySpace, a unit of News Corp., had alleged that some of the messages were sent from users' accounts whose sign-on information had been hijacked by "phishing." Media Breakaway countered that rogue business affiliates -- independent contractors who sent messages for Media Breakaway -- were to blame for phishing and other improper behavior.

In a statement, Media Breakaway celebrated the fact that the arbitrator had awarded MySpace "95 percent less than the amount demanded" by the company.

MySpace had originally asked for $100 million in damages and $2 million in attorney fees.

Thursday's arbitration ruling pales next to a $230 million verdict MySpace won in U.S. District Court last month against two Internet marketers, Sanford Wallace and Walter Rines. Nevertheless, MySpace hopes the Richter case will increase the pressure it has been trying to place on spammers.

Richter is a familiar figure in such matters. Microsoft Corp. won a $7 million settlement against him in a spam lawsuit in 2005, and the state of New York got $50,000 from Richter the year before.

However, Richter's father, Steven Richter, who serves as Media Breakaway's president and general counsel, said Monday that the company has worked harder in recent years to stay clean. He said Media Breakaway now has five employees tracking its legal compliance, up from one in 2006.

In this case, he said, Media Breakaway had misunderstood MySpace's rules prohibiting commercial messages. "Once they told us it was wrong we threw the iron curtain down on it," Richter said in an interview.

The Washington Post recently examined 15,000 spam-advertised domains and found nearly half were registered through a Broomfield, Colo., company called Dynamic Dolphin. Dynamic Dolphin is owned by a company called CPA Empire, which in turn is owned by Media Breakaway, the newspaper reported.

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