A Westminster Internet marketing company has been ordered to pay MySpace $6 million in damages and fees after being accused of spamming its users.
An arbitrator ruled that Scott Richter and his Web marketing company, Media Breakaway LLC, must pay MySpace $4.8 million in damages and $1.2 million in attorney 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., alleged that some of the messages were sent from accounts whose sign-on information had been hijacked by “phish ing.” Media Breakaway countered that rogue business affiliates — independent contractors who sent messages for Media Breakaway — were to blame for phishing and other improper behavior.
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.
Richter’s father, Steven Richter, who is 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 has five employees tracking its legal compliance, up from one in 2006.
He said MySpace filed the complaint based on one incident in which a Breakaway affiliate sent unsolicited e-mails to MySpace members. That affiliate was fired, and Breakaway agreed to work with MySpace to prevent future problems, Steven Richter said. There were no problems for 10 months, then another affiliate did the same thing.
“It’s not a lucrative market at all,” Steven Richter said. “We don’t believe any money was made having these unsolicited bulletins go out on MySpace.”
Scott Richter said the settlement is much less than what MySpace originally asked for — $100 million in damages and $2 million in attorney fees.
