Cases in the News

Cases in the News

Former 'Spammer' Confesses to Tricks of Junk E-Mail Trade

Exposure to Legal Liability

As a phenomenon of Internet usage, the issue of legal liability for the use by employees of the Internet manifested itself first in the USA. Subsequently it has also been raised with increasing frequency in the UK, the rest of Europe and in the Asia-Pacific rim. Compared with the cost of damage to the network, such as through email-borne virus infection, the penalties awarded from lawsuits have been substantially higher.

USA: Smith Barney, Citibank, Nissan, Chevron, Bear Stearns - cases involving email misuse, sexual or racial harassment via email, a number of them resulting in multi-million dollar penalties.
Germany: a senior manager at CompuServe Germany given a jail sentence for facilitating the publishing of obscene material over the Internet.
UK: Norwich Union insurance forced into an out of court settlement of £450,000 for alleged defamation by email against a competitor, Western Provident Association

Legal Costs Paid to Employees

The San Diego Union-Tribune, November 11, 1998. In 1995, the Chevron Corp. paid $2.2 million to four female employees to settle a suit in which the women claimed they were sexually harassed because of jokes sent through the company's e-mail system. and Relay Attacks

Derived from a sketch in Monty Python's Flying Circus, the term Spam has come to mean unsolicited or junk email.

The Associated Press - 5th July 1999. Jose Omar Olaya, 24 from Colombia sent an email to private individuals and employees of Davivienda Bank urging all account holders to withdraw their funds. Panicked account holders withdrew $11.4 million from the bank in a single day, forcing the government to lend Davivienda some reserves. Olaya was arrested at his home and could face up to eight years in jail.
NetMatters and Continuum: two UK ISPs suffered consistent Spam attacks of over 300,000 messages per hour over a ten hour period which brought their services to a standstill.
Karolinska Institutet, Smittskyddsinstitutet: two Swedish medical research institutions targeted and bombed by animal rights groups with subsequent loss of network service.
A Pacific Rim government agency, that found itself the victim of a relay attack from an anti-government protest group. The group relayed a message so as to broadcast damaging statements, but made it appear that it originated from the government agency.

Loss of Confidential Information and Trade Secrets

Increased email traffic can mean increased scope for security breaches:

Siemens Nixdorf: accidental distribution of confidential internal emails to the Rheinische Handwerkergesellschaft, an unconnected trade workers' association.
Symantec and Borland: a legal case brought about by the alleged emailing out of confidential trade secrets by an employee who was preparing to leave the company.
A leading Australian travel distribution company, unintentionally forwarded its customer list to a competitor after selecting an incorrect alias while addressing the email.

Employee Terminations for email and Internet Abuse

Daily Telegraph - July 1999. Focus Management Consultants employee Lois Franxhi has lost her job over personal Internet use to book a holiday at work, and has taken the company to court for unfair dismissal. She lost the case but this has highlighted the need for companies to enforce official corporate Internet policies. Without detailed procedures in place, both companies and employees stand to lose from costly legal proceedings.
News of the World - 12th August 1999. Two employees from Kwick Fit were sacked after it was discovered they were sending raunchy emails to each other over the company email system. Both employees have filed unfair dismissal claims, but one has already lost the case.
1999 - New York Times fired 22 employees in Virginia for transmitting pornography and off color jokes via company email.
1999 - Xerox Corporation fired 40 employees for spending work time - in some cases up to eight hours a day -surfing pornographic and shopping sites on the Web.
Associated Press - July 2000 - Dow Chemicals fired 50 and disciplined another 200 employees for sending pornography and violent images from company computers via the company email network.

Legal Liability

Computer Weekly - 1st July 1999. Gas distribution firm BG paid out £101,000 libel settlement to rival Transco, after a BG senior manager sent a defamatory e-mail to Transco staff. The email wrongly suggested Exoteric Gas Solutions (EGS) created by BG had misused confidential information from Transco. It now puts the onus on employers to show they have taken all reasonable steps to enforce a policy and make sure employees are aware of the policy said Jeremy Hertzog, solicitor with Mishcon de Reya, which brought the case. Employers will also need to implement disciplinary proceedings when their staff abuses the rules.

Sexual Harassment

Network News - 21st July 1999. Cisco-certified engineer, Neil Campbell has been convicted of sending a sexually abusive e-mail to a female employer of distributor Total Network Solutions. According to Mike Harris, marketing director of TNS, Campbell hacked into their network in March and pretended to be one of the distributor's salesmen. The police were called in to investigate and the case went to court where Campbell pleaded guilty to a charge of malicious communication.
Human Rights (USA), January 1, 1999. In Bourke v. Nissan Motor Co. (YC 003979 Cal. Super. Ct., L.A. County 1991, affirmed by the court of appeals in 1993), two individuals hired to set up an e-mail system between Nissan and its Infiniti dealers were fired for using that system to send personal messages containing inappropriate sexual humor. In dismissing the employees' subsequent suit for invasion of privacy, the court found that the employees had no reasonable expectation of privacy. When hired, they had signed a waiver stating "it is company policy that employees and contractors restrict their use of company owned computer hardware and software to company business."

Market statistics

The vulnerability of organizations to spoofing was borne out in a survey by Content Technologies in 1999, which established that 95% of respondents would not think to question the origin of an email purporting to come from their manager or supervisor.
The 1999 CSI / FBI Computer Crime and Security Survey highlighted 23 companies that lost $43 million through the theft of proprietary information.
A survey in December 1998 by the US publication Infoworld estimated the cost to US businesses of intellectual property theft at $250 billion a year.