Rather than pursue a case under Britain's limited anti-spam laws, Microsoft filed a complaint that Fox had breached the terms and conditions of its Hotmail service. It conditions state: "You may not use any [Microsoft] Services to send Spam. You also may not deliver Spam or cause Spam to be delivered to any of Microsoft's Services or customers."
A Microsoft spokesperson said: "Under a Court Order, breach of which would be contempt of court and a criminal offence, Mr Fox agreed not to repeat his spamming against Microsoft or any ISP and to pay £45k ($83k) by way of damages and as a contribution to Microsoft's legal costs."
Microsoft's case claimed that Fox was running a business via his spamming.
"The beneficiary of the campaign was a pornographic video download site," said the spokesperson. "The victim would receive an email with a mobile phone number that they would text to receive access to the site. This is how the spammer was able to make money."
Struan Robertson, editor of OUT-LAW.COM and a technology lawyer with Pinsent Masons, said Microsoft's action could be a better deterrent for British spammers than anything in the country's anti-spam law.
An anti-spam law was introduced in 2003 in the Privacy and Electronic Communications Regulations, but its powers are very limited.
"The Regulations generally don't stop spam being sent to work email addresses," said Robertson. "And anyone wanting to sue a spammer has to be sure that the spam originates in the UK. They also have to show damage and claim compensation for that damage – rather than claiming for the cost of dealing with all spam received in their inbox."
Robertson added, "The Information Commissioner has very little power to deal with spam. The Regulations require him to serve an order on a spammer, telling the spammer to comply with the law. Only if he breaches that order is there an offence – and even then, the maximum fine is only £5,000."
The office of the Information Commissioner has recently said that is in discussion with the Department of Trade and Industry to increase its powers.
To date the Commissioner has never taken legal action against a spammer and there has only been one known private case under the Regulations. Chartered engineer Nigel Roberts sued a Scottish marketing firm for sending him unsolicited email. Media Logistics (UK) Ltd did not defend the small claim action and paid Roberts £300.
Microsoft's approach is not unique. In 1999, Virgin Net sued Adrian Paris in a spam case that, like Microsoft's case, was based on a breach of contract and claimed trespass. The ISP had been blacklisted by an email blocking system because of the spam coming from one of its addresses. It ultimately settled the case out of court.
Microsoft tracked the progress of Fox's spam messages through its systems. "To evaluate the scale of the threat, on one day in April Microsoft sampled 20,000 of its 200 million accounts and discovered 70 different Hotmail email accounts had been hit," said the spokesperson. "Some were hit with over 250 emails on the one day. It was therefore a very high volume spam campaign."