This Little Piggy Went to Utah

AND THE AWARD FOR THE most parasitic, calculated, industry-killing company that cynically plays on parents' fears to get business goes to…drum roll, please…Unspam!

As many Direct readers know from our online coverage, this amoral leech of a company is behind the two laws enacted last summer in Michigan and Utah that allow parents to register children's e-mail addresses and other “contact points” as off limits to messages with content or links to content that's illegal for them to view or buy. Unspam runs the registries.

E-mailers who want to include such material, such as a beer-brewing e-mail newsletter, are supposed to scrub their lists against these registries for $5 and $7 per thousand addresses checked in Utah and Michigan, respectively.

Iowa, Georgia, Connecticut, Hawaii and Wisconsin are considering similar legislation. Unspam is behind them, too.

Let's see: Unspam lobbies for the laws, helps write them, wins the contracts and then profits from them.

Is there a pony somewhere in that dung pile?

Ahh, yes. Unspam claims to be protecting our children from online predators. We'll address that a little later.

Let's discuss financial incentives first.

According to Unspam's contracts with the states, the company gets $4 per thousand addresses checked. That's an 80% cut in Utah and a 60% cut in Michigan. Not bad for a few months of cynical fear mongering.

E-mail service provider Skylist provides a similar service to help its clients comply with the Can Spam Act for $25 per million addresses checked.

Gotta love Unspam's government-enforced margins. Folks, we're all in the wrong business.

But wait, it gets better.

Unspam has applied for a patent on the technology it uses to maintain Utah and Michigan's registries. If it wins the patent, any company that operates a registry for one or more of the other states could conceivably have to pay Unspam licensing fees.

Think about the beauty of this arrangement. If Unspam loses state no-e-mail-to-kids contracts to other companies, it can leech off their work without having to actually do anything. As a result, it would be leeching off e-mail marketers and the registry operators that scrub their lists.

The audacity is breathtaking.

But Unspam isn't through gaming us yet. The company's contracts with Utah and Michigan verify that Unspam suspects its scheme is not nearly as safe as chief executive Matthew Prince claims.

Anyone with a lick of sense and a rudimentary understanding of how databases work can figure out that no matter how secure Unspam's registry is, unless it acts as a service bureau and delivers marketers' e-mail to the scrubbed lists, there's nothing Unspam can do to prevent an e-mail sender from reverse engineering the process to get kids' names.

All it would take is one rogue employee who's about to be fired at one of the pornography outfits using Unspam's service to compare the list his company sent to Unspam to the list Unspam sent back. He could then figure out what names aren't on the scrubbed list, and voilà! He's got a sub-list of verifiable children's e-mail addresses fresh off the database and ready for the house pedophile.

Unspam claims it has a scheme to detect misuse, but once it does the address already is irrevocably in the wrong hands. It's the proverbial bell that cannot be unrung. Unspam executives apparently understand this.

The company's contract with Michigan says the state “acknowledges and recognizes that senders comparing their e-mail lists against the registry may extrapolate valid information on addresses that are listed on the registry, and that the vendor has no duty to ensure that senders will not misappropriate the data received.”

Unspam's contract with Utah says “persons comparing their e-mail lists against the registry may extrapolate valid information on the addresses listed on the registry” and that “Unspam has no duty to ensure that [senders] will not misappropriate the data received.”

Nice.

And all along, Prince has resorted to smear tactics to defend his scheme.

For example, when MediaPost's Online Media Daily covered the news that four national advertising organizations and two online civil liberties groups had filed amicus briefs in favor of pornography group Free Speech Coalition's lawsuit against Utah over its registry, reporter Wendy Davis dutifully included comment from Unspam:

“Matthew Prince, CEO of Unspam, said he was ‘surprised’ by the attempt of groups representing mainstream marketers to get involved in the case. ‘I'm surprised that organizations like the Association of National Advertisers — whose boards are made up of companies like Wal-Mart and LeapFrog, and who have been at the forefront of protecting the rights of individuals and parents to choose what material comes into their homes — would support a lawsuit by the pornography industry, arguing that they have the right to send whatever and whenever they want, and to whomever they want.’”

No one in this case is arguing that they should be able to send anything they want to anyone. They're arguing that the registries place an unfair cost on legitimate, law-abiding marketers while doing nothing to protect our kids, and possibly even exposing children's e-mail addresses to predators.

It's doubtful that Prince picked Wal-Mart's name out of thin air. More likely, he knows Wal-Mart and LeapFrog Enterprises have clipping services monitoring their press mentions, and they'll be made aware that their names were mentioned in connection with a pornography group's lawsuit.

It is difficult to imagine a business model more offensive than Unspam's.