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Blue Mountain Arts Sues WebTV and Microsoft for Email Blocking

By Net4TV Voice
(December 20, 1998)

Blue Mountain Arts, a free greeting card greeting card site that is popular with WebTV users, has filed a lawsuit against Microsoft and WebTV for blocking its cards as "spam."

The lawsuit, filed in California Superior Court in Santa Clara County on December 8, alleges that Microsoft is purposefully trashing cards from Blue Mountain because Microsoft has decided to compete in the same business.

Outlook Express Spam Filters

Blue Mountain's primary complaint is against Microsoft's just-released Beta version of Outlook Express, the email component of the beta version of Internet Explorer 5.0. One of the new features of the email program is spam filtering which sends suspected junk email automatically to a folder from which it can be deleted without being read.

In the current Beta version of Outlook Express, released in early November, Blue Mountain greeting cards are automatically routed to the spam folder for discard. Upon discovering this, Blue Mountain promptly complained to Microsoft. A Microsoft representative, Mike Culver, advised Blue Mountain that a bug in the Outlook Express program was causing Blue Mountain cards to be trashed, but that the problem would not be fixed until its next beta release of Internet Explorer at an unspecified future date.

Microsoft Competition Made Blue Mountain Suspicious

Blue Mountain was understandably upset. The greeting card service is free, and the company derives its revenues from the advertising that both the senders and recipients of its cards can view when they come to its site. Blue Mountain states that its biggest usage is the period from November 1 to Valentine's Day, so it stood to lose quite a bit from lost ad viewership during its heaviest season.

Of greater concern to Blue Mountain, however, was its reputation if its cards weren't delivered. Email greeting cards are not only popular in their own right, but also are frequently "last minute" greetings for birthdays and holidays where users rely on the speed of email to keep their relationships together. Blue Mountain states that reliable delivery of its greeting cards is critical to its reputation with its customers and therefore to its business.

What made Blue Mountain suspicious that this was more than "just a bug" was the timing of the Outlook Express filter. Right about the same time that the new beta version with the spam filters was released, Microsoft itself entered the greeting card business as a Blue Mountain competitor at the site

In its suit, Blue Mountain pointed out the similarity between their situation, and a situation with Real Networks and Caldera. Microsoft is in competition with both of these companies and allegedly introduced elements into its Windows software that caused the competing software to fail. Real Networks demonstrated the problem at the Senate Judiciary hearings in July, while Caldera has filed suit against Microsoft for intentionally interfering with its business. In both cases, the "bugs" have been fixed after being made public.

How WebTV Got Involved

As Net4TV Voice has reported over the last three issues, WebTV's anti-spam efforts have resulted in the blocking of a large amount legitimate email as well as eliminating of the some unsolicited commercial messages sent to WebTV users. In our December 6 issue, we reported that WebTV is working on new spam-blocking methods that will, we hope, put an end to the wholesale blocking of ISPs and domains that are not true spammers.

Blue Mountain was apparently one of those domains that was caught in the block. The complaint states that, without notification to Blue Mountain, WebTV blocked email including greeting cards from Blue Mountain for some period in late November. When the block was discovered, Blue Mountain complained to WebTV and the block was removed. Blue Mountain feels that some cards were inevitably lost, however, and sees the WebTV block as part of an overall Microsoft pattern of anti-competitive behavior.

The complaint against Microsoft, WebTV and ten "John Does" (unknown persons whose names will be inserted later) alleges unfair competition, intentional interference with contractual relationships, intentional and negligent interfernces with a prospective business advantage, unjust enrichment and trade libel. It is seeking injunctive relief and unspecified actual and punitive damages, as well as attorney's fees.

Net4TV Voice's Observations and Editorial Opinion

We hate to be in a position of saying "I told you so," but it's not nice to interfere with people's email. The Electronic Communications Privacy Act prohibits intercepting and reading someone's email without their permission. But even though it says nothing about being required to deliver it, blocking email as "spam" without the permission of the addressee interferes with the reliability of email itself.

WebTV is not the only ISP who has taken its fight against spam all the way to blocking of entire domains -- it's an issue that is regularly discussed on ISP mailing lists and newsgroups. But the general consensus with ISPs with whom we have spoken is that WebTV has gone overboard in its zeal to keep spam off its network.

It was an issue that was bound eventually to come up in court. There have already been lawsuits about spam that have been won by ISPs, but the defendants have been major spam houses who were using the ISP's email server to deliver huge floods of unsolicited and unwanted mail. To our knowledge, the right of an ISP to block of all mail from a domain that has been used by a spammer has yet to be tested in court. This may be the case, although it's more likely to be settled before it comes to trial.

WebTV has tried to cover itself with its users in its Terms of Service. The TOS states that WNI will not be liable for any damages arising out of the use (or inability to use) the network, and likely would claim that this covers the delivery of email (although it does have a separate email section that does not mention blocking, either). But the TOS does not cover the damage that is done to non-WebTV subscribers by WebTV's blocking of their legitimate mail to WebTV users.

We strongly recommend that WebTV make personal email filters a top priority so that users themselves can decide whose mail gets blocked from their boxes. Spam is bad, email is important, and lawsuits don't help anyone but lawyers.

Blue Mountain's Notice of Suit

The Blue Mountain Lawsuit

WebTV's Block List (Updated Daily)

Our Previous Coverage of Email Blocking:

Dec. 6: WebTV Working On New Options for Spam

Nov. 22: WebTV Spam-Block Catches Tripod, MSN and FutureNet

Nov. 8: WebTV Email Blocking Continues

Oct. 25: WebTV Blocking Email From AT&T, Other Major Online Services

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