CIS 4398

Independent Study for CIS



Ethics in E-Commerce with a focus on

Unsolicited Commercial E-mail


Timothy Mang


August 6, 2002

Dr. Godwin Udo

Dr. Peeter Kirs

University of Texas at El Paso

Ethics in Unsolicited Commercial E-mail


Ethical business practices are a keystone to success in any business.  Wall Street has taught that without ethics, economic forces will force companies out of business.  The current Enron scandal is a shining example of unethical business practices.  A top Fortune 100 Company, Enron plummeted from 100 Billion dollars of profit to bankruptcy in less than a year.  Attempts to cheat the ethical business world left such a bad taste in the mouth of potential investors no other companies or banks would aid Enron in its fight for survival and new competitors with better reputations moved in on the business opportunity.  While a company may exist, and even thrive for a while, eventually the unethical practices catch up to it and the company fails.  E-commerce companies are no different than brick and mortar companies such as Enron.  Ethics will prove, over the long run, to be very much a part of a successful E-Business.

              “Junk mail” has been around almost as long as the post office has been delivering mail.  Direct mail advertising is a good way for companies to get their products in front of potential consumers at substantially lower cost compared to television and radio advertising.  Data gathered from 187 small local retail firms in 41 states indicated that direct mail is perceived as a valuable advertising medium and analysis suggests that direct mail is significantly more valuable than weekly/community and daily newspapers.  (Briefly, 1)  In much the same way, Unsolicited Commercial E-mail (UCE) has become a very successful endeavor for e-commerce companies.  The cost to send e-mail to thousands of users is significantly lower than traditional methods of mail delivery.  This in turn leads to a lower cost of advertising for e-commerce companies versus Direct mail advertising through the Post office.  In the fall of 1999, it was reported 19% of online businesses used e-mail to seek new customers and 45% of online businesses planned to employ e-mail for new business in the upcoming year.  (Sheehan, 37)

Another reason for the success of UCE is a higher response rate from consumers.  Forrester Research found that click through rates on e-mail were much higher at 18% than traditional website banner ads at 0.18%. (Hinde, 400)  The more successful an advertising avenue is, the more likely a business will adopt that method.  E-Mail remains the number one mission-critical application on the Internet and is used by more than 60.6 million business users. (Hancock, 188)  With more and more people turning to the Internet for information and communication and the rise of e-mail as one of the most important features of the Internet, ethics must play a role in helping e-commerce succeed.


History of UCE

Unsolicited commercial e-mail can trace its roots back to about 1994.  UCE began in the USENET newsgroups.  Newsgroups are online discussion forums where individual topics comprise a forum to post messages.  Users log in to a newsgroup service and can browse any of the thousands of newsgroups available discussing just about any topic imaginable.  Once inside a newsgroup, a user could read and post messages to other users perusing the same forum.  In 1994 a small legal firm decided to advertise their business in the USENET newsgroups.

This is the first time a commercial entity can be tied to a large-scale attempt at advertising to digital users.  The law firm posted in each and every newsgroup an advertisement for their services in the “Green Card Lottery” being offered by the U.S. Immigration office.  This was not the first time each and every newsgroup had been posted to by the same person, but it was the first time it wasn’t done anonymously.  As the complaints and flaming, negative derogatory e-mail messages mounted to the firm, the law firm quickly stepped up and defended their actions as a valid business practice.   The attempt to reach many potential customers with little cost of service was a success.  The payoff for their efforts was between $100,000 and $200,000 dollars.  The revenue produced wasn’t remarkable in itself, except that the cost of posting all of those messages was negligible according to Mr. Canter one of the lawyers of the law firm.  (Feist, Online)  This relative success helps to explain why other entities quickly turned to the practice of Unsolicited Commercial E-mail as one of the forms of advertising to be used.


Ethical Unsolicited Commercial e-mail Practices 

          UCE is a valid business practice with great potential for small company start-ups with little to no starting capital.  Unfortunately, the most frequent unwanted UCE messages were get-rich-quick schemes, adult ads (pornography) and software offers.  (Spam Report, 10)  In order to engage in UCE in a manner that is ethically correct a company already has plenty of standards and guidance in place.  Many of the pitfalls of unsolicited advertising can be avoided by using the established methods used in direct mail advertising.  Many parallels in ethical advancement of UCE can be made with direct mail advertising.

            In order to send advertisements to potential consumers, there must be a destination address.  Direct mail advertising companies methods for obtaining addresses include using the telephone company directories, credit reporting agencies and city directories to name a few.  There are also demographics companies that collect more than just address information.  The approximate income levels and ethnicity are included to help determine the approximate likes and dislikes of consumers in the target area.  The direct mail advertisers contract from these groups to obtain mailing addresses to be used.

Some of the methods used by UCE companies are inappropriate.  In one example, early on, UCE companies would use programs designed to search through the newsgroups, cull out and create a database of e-mail addresses contained in the posts. (Neumann, 112)  This almost caused newsgroups to cease to exist.  Once users of the newsgroups realized that each time they posted to a newsgroup, they would get deluged with e-mail advertisements, the user was less likely to post again if at all. 

There are two ethical problems with this method of gaining e-mail addresses for use in advertising.  The first problem was the servers where the newsgroups were posted had not given UCE companies permission to search their databases of newsgroup postings to strip out e-mail addresses. Without permission to use the service provided in this manner, the UCE company is building a bad business relationship. 

Second, newsgroup companies thrive on the activity of each newsgroup.  More postings and better dissemination of information between newsgroup users is what builds the newsgroup business for companies.  If the newsgroup becomes less active, then users don’t have a reason to pay for the service of reading a newsgroup.  UCE companies were causing forums to be less active.  This is worse than stealing the customers of the newsgroup company, UCE companies were driving them right out of business.  The paradox here is the UCE company was relying on the very business it was destroying. 

Another avenue to e-mail addresses comes from websites.  The success of the Internet has led some companies to create website databases of public information about people including e-mail addresses.  These websites were created to bring together information on people into central databases to allow friends and family to lookup long lost family members or acquaintances. and are examples of such companies that provide this service.  (Sikorski, 413)  UCE companies began entering into these websites and conducting extensive searches on these databases to collect e-mail addresses.

The ethical downside to this method of collection is that UCE companies are conducting large-scale searches on these websites at the expense of the website company.  UCE companies are using the website services in a manner not intended by the website company and as such aren’t acting in good faith.  The website company is attempting to create a place where people can come together and find each other.  As users realize that these sites are being used to gather e-mail addresses for advertising purposes these users are asking that the e-mail address be removed from the database.  This is reducing the amount of information available to the website company and thus reducing their effectiveness to provide the service intended.  Again, UCE companies are destroying the very part of the business they need to continue to operate.

As the Internet has grown, so have the Internet Service Provider (ISP) companies.  ISPs, in an attempt to differentiate from the competition, look to provide new services.  One such service is the chat room.  Chat rooms are a place where Internet users can gather and hold conversations with other people in real time with flowing conversation.  One of the options available to users is to click on fellow users in the chat room and bring up information about the user.  This allows users to make available, to fellow chat room folks, information about themselves.

UCE companies began logging into these ISPs to gather e-mail addresses.  The UCE company would use a program to systematically enter all chat rooms and acquire all the e-mail addresses associated with the users in the chat rooms.  This was a simple and effective process on America Online, the largest ISP in the U.S., as each of the usernames in the room is associated with an e-mail address that is active and working. 

Again, the UCE companies are using another company’s assets in a manner that was not intended to generate the databases of e-mail addresses to be used.  It also serves to minimize the effectiveness of ISPs to operate and grow their business.  As users found that by entering chat rooms users were inviting UCE, users responded by no longer using the service.  This leads to a degradation of service and could cause some users to leave the ISP as differentiation is lost.  This again leads to less active e-mail addresses, thus leading to a smaller market for UCE.

UCE companies like all direct mail companies need destination addresses in order to run their business.  Collecting e-mail addresses is going to be an ongoing concern for a UCE company to stay in and grow the business.  The method chosen to collect e-mail addresses must be done in a manner that is ethical and approved of by the service providing the e-mail addresses.  Using other company’s assets in a manner not intended is not acceptable.

Each of the methods of e-mail address collecting presented can lead to another ethical problem that has not been discussed.  None of the aforementioned methods used to derive e-mail addresses can truly discern the likes or dislikes of the user or users of those collected e-mail addresses.  This can lead to problems for those UCE companies that intend to distribute advertisements concerning pornographic or adult related content.  There is already an accepted standard to use to determine what pornographic or obscene content is.  In determining pornographic content, The “Community” Standards test should be used.  The “Community” Standards test can be found in the Supreme Court decision concerning Miller v. California cited below.

Miller v. California, 413 U.S. 15, 23 (1973). In Miller, the Supreme Court announced what remains to this day the three-part test for identifying obscene speech:

(a) whether the average person, applying contemporary community standards would find that the work, taken as a whole, appeals to the prurient interest, (b) whether the work depicts or describes, in a patently offensive way, sexual conduct specifically defined by the applicable state law; and (c) whether the work, taken as a whole, lacks serious literary, artistic, political, or scientific value.1


As UCE companies begin to evaluate their products this “Community” test must be applied to determine if the product will fall into the pornographic category.

            Currently pornographic content finds itself among the most frequent topics in UCE deliveries. (Spam Report, 10)  As companies choose to advertise and sell these products, a higher standard in choosing which e-mail accounts are to receive these advertisements must be adhered to.  There are two ethical concerns that need to be addressed.

            The first ethical problem arises when a UCE company sends a pornographic product advertisement to someone who doesn’t wish to be associated with pornographic products.   Some people choose not to take part in pornographic product purchases because pornography is reviled and considered unethical in some sections of the population.  By contacting someone who thinks pornography is unethical about purchasing pornographic products, the UCE has failed in running its business in an ethical manner.

UCE by definition is unsolicited, so how do the UCE companies determine who to send the pornographic content to using the methods of collection described above?  Simply, it can’t.  Sending advertisements concerning topics that some people might find inappropriate or objectionable is unethical.  To remain ethical, UCE companies need to adhere to the wishes of computer users and err on the side of caution by not distributing pornographic content to an inbox without explicit adult consent.

Those UCE companies that do decide to enter into advertising for pornographic content must acquiesce to the higher standard for a second ethical reason. If the advertisement to be sent out meets the “Community” Standards test, as noted above, as pornographic then the UCE must comply with the standard set forth by the US Congress for distribution of obscene materials.  The Federal law prohibiting use of the mail service to distribute pornographic content is excerpted below.

United States Code Title 18, Part I, Chapter 71, Section 1461 states in part: 

Every obscene, lewd, lascivious, indecent, filthy or vile article, matter, thing, device, or substance and -

Every paper, writing, advertisement, or representation that any article, instrument, substance, drug, medicine, or thing may, or can, be used or applied for producing abortion, or for any indecent or immoral purpose; and

Every description calculated to induce or incite a person to so use or apply any such article, instrument, substance, drug, medicine, or thing -

Is declared to be nonmailable matter and shall not be conveyed in the mails or delivered from any post office or by any letter carrier.

The distribution of pornographic materials should not be delivered to an address without express prior consent of the adult resident of the address for direct mail companies.  UCE companies must adhere to the same standard when engaging in the distribution of pornographic materials to allow the owner of the e-mail inbox to control the type of messages received.

            The issue of control of the e-mail inbox becomes an even greater concern when families are involved and access is granted to minors.  Families sometimes share an e-mail box between children and parents alike in order to facilitate communication with family members not living in the same house.  If a UCE company that is engaging in distribution of pornographic content were to send lewd or indecent materials that were then opened by minors the company may unknowingly engage in exposing a minor to pornography.  By sending such materials to a minor a UCE company leaves itself open to potential legal problems by feloniously distributing pornographic content to a minor across state lines.

            The ethical UCE company would be sure to take all aspects of delivery of pornography into account when setting up the e-mail addresses to be used for distribution.  Sending pornography to everyone on the list without express consent from the adult of the e-mail address could lead to multiple instances of unethical conduct in a single e-mail.  The reputation gained from distributing pornography to minors or audiences that oppose such materials will lead to strong anti-UCE sentiment that is already in abundance among users on the Internet.  In order for UCE to continue to grow as a viable business, trust must be garnered by UCE companies from the users of the Internet.

            Direct mail companies have over time developed trust from the people that they send their mailings to.  People who head to their mailbox in the front yard do not fear they will get lewd and indecent mailings without prior written consent.  Over time people may begin to actually even read the materials being sent to them.  The return address on the letter is a place for a person to get a sense of who sent the mail.  With this information people can rely on the information being accurate or at the very least in good taste.  The same can be said for e-mail.  Often people will look at the return address on the e-mail to determine if the mail will even be opened before it is deleted.

            Some UCE companies recognize that people don’t want to be bothered or want to have some trust that the person sending the letter is someone they know.  These UCE companies may resort to putting a false address or “spoofing” the return address on their e-mails to disguise the real sender.  This is an attempt to ride on the backs of those companies that have worked hard to earn a good reputation and trust in the community to get users to open and read the advertisements contained in the e-mail.    One of these companies, Juno online filed a 5 Million dollar lawsuit against 5 known spammers, and 10 that had yet to be identified, for using its name as a return address in e-mail headers alleging false designation of origin and false description.  (Samorski, 678)

            Spoofing the return address poses two ethical problems.  The first ethical problem deals with trust.  The UCE company that engages in spoofing the return address has immediately loses all trust and quite possibly angered the user by tricking them into opening the e-mail.  Who wants to do business with someone who opens the line of communication under a false pretense?  A business relationship must be built over time and under the very strictest standards involving trust.

            The second ethical issue deals with the complaints and lost business the “spoofed” company receives.  Through no action of its own, a company may have to defend itself to users in its own community for the actions of others.  This puts undue stress on the customer service department of the company that was spoofed.

Over time UCE companies could build a reputation for ethical advertising provided the return address remains true to the original sender and the UCE company provides a service or product that its potential customers might be interested in.  This will also build trust among users that the UCE company is just trying to build a business in this competitive Internet economy rather than make a quick buck at the expense of others.

Another aspect of the trust issue is the placement of a link within the body of the e-mail message to allow a user to click a link and be removed from the e-mail database of an ethical UCE company.  This is a quick and effective way for a UCE company to send messages to only those users who wish to receive UCE.  Sending UCE to only those users who aren’t opposed is the best way to ensure long-term success.  By continually sending e-mail advertisements to people not interested, a UCE company can actually create an enemy of the business.

Some UCE companies have decided to use the link within the e-mail address for a different purpose than intended.  Rather than opting a user out of future UCE for clicking on the link, some UCE companies use this action to verify that the e-mail address that was entered is an active e-mail address.  This e-mail address is then updated in the database as active and may be inundated with UCE as the e-mail address is more valuable now that it is verified.

As in the spoofing of the return e-mail address, using the opt-out link to verify an e-mail address is an extremely unethical practice.  It again destroys the faith users have in the link actually being of any use and breaks the trust in doing business with the company.  Without trust, a viable business relationship cannot be established.

This practice also infringes on ethical companies legitimately trying to give users a convenient method to indicate the desire to no longer receive the e-mail advertisements. Those UCE companies trying to grow a long-term business then lose the opportunity to truly gauge the interest in their products by potential customers.  Infringing on other companies abilities to grow and build a business as well as using underhanded methods to obtain e-mail addresses has allowed a small group of UCE companies to give the entire industry a bad reputation.


Legal intervention in UCE

The UCE industry also has a bad reputation due to the propensity for fraud.  An example of damage due to fraudulent e-mail involved two men engaged in distributing UCE that defrauded victims of more than $250,000 dollars.  (Hancock, 9)  Fraud to this extent is one of the reasons that U.S. lawmakers have taken notice of uncontrolled UCE. 

States have entered into the legal business of attempting to control the UCE onslaught in their own back yards.  California and Washington are two of the states that have enacted state legislation to help curb the tide of UCE into and out of their respective jurisdictions.

Washington’s state law permits users to sue UCE companies that use false return e-mail addresses for messages sent to or sent from the state of Washington.  A Seattle man collected $200 dollars from a company that violated the state law in Washington by having misleading or false information in the e-mail header.  (Make Big $$$$, 10)

California’s state laws attempt to label the UCE with “ADV” in the subject header of the e-mail message to indicate the e-mail is an advertisement.  This header label would allow for software filters to easily remove the UCE from the inbox of a user who does not wish to receive UCE.  The California state law also intends for the sender to include in the body of the message a toll free phone number or e-mail address that allows the recipient to decline future contacts.

The problem with state laws to stop UCE is when they run afoul of the dormant commerce clause of the United States Constitution. (Kelin, 4)  When the Constitution was ratified, Congress gained the power to regulate interstate commerce.  A negative inference arose that States no longer had that same power.  States cannot, even in the absence of Congressional action, regulate interstate commerce.      

As the basic structure of the internet crosses state lines and any commerce conducted stands a large percentage chance of the consumer residing in one state while the seller resides in another, state laws by definition will inhibit inter-state commerce.  Therefore the best hopes for anti-UCE legislation rest in the hands of the federal government. 

Congressional constituents have harangued their representatives into action to help stem the tide of unethical e-mails.  This could cause undue legislative hardships on those UCE companies trying to grow and build an ethical and profitable business, but probably a necessary evil to help lend rules, regulations and most importantly financial punishments to those companies engaging in unethical UCE.

The federal level of the government is taking an active role in trying to regulate and control UCE.  Introduced so far by the House of Representatives in the 107th Congress is the Unsolicited Commercial Mail Act (H.R. 95), Wireless Telephone Spam Protection Act (H.R. 113), Unsolicited Commercial Electronic Mail Act (H.R. 718), Anti-Spamming Act (H.R. 1017), Who Is E-Mailing our kids Act (H.R. 1846), Protect Children from E-Mail Smut Act (H.R 2472) and Netizens Protection Act (H.R. 3146).  The Senate has also introduced the Controlling Assault of Non-Solicited Pornography and Marketing Act (S. 630).  Again there is much debate concerning the rights of the American Citizens to privacy and the ability of consumers to control their own destiny.

Restrictions Congress is considering by passage of these legislative acts will include the following: (No More Spam, 8):

1.      Banning of all UCE

2.      Requiring the use of the word “advertisement” in prominent position in the e-mail or the e-mail header

3.      Prohibiting UCE companies from sending messages to anyone who has requested not to receive e-mail from that source


One of the best ways to truly affect unethical use is self-regulation.  Professional associations are meeting and developing guidelines to be followed voluntarily by their respective members. But ultimately, the burden falls to the individual using the internet.


How to Stop Unsolicited Commercial E-mail

For the consumer there are many ways to stop UCE from arriving in their e-mail boxes.  The first and easiest strategy is to protect your e-mail address like you do any other item involved in personal information.  While most people wouldn’t think of just handing out their telephone number or social security number, many users will enter their e-mail address in a website they visit for the first time.  (Sikorski, 1219)

Using multiple e-mail addresses is another common way to help block UCE. (Sikorski, 413)  Most ISPs allow the users multiple e-mail accounts with their monthly fee.  Users can create an e-mail account they use while surfing the web and visiting websites and keep their personal account private for family and business associates only.

A third option is to use software filters.  (Sikorski, 413)  There are websites that provide a service to filter UCE from e-mail received by online users.  These websites build databases of known UCE abusers and automatically filter messages from these companies from the website inbox used by the customer.  The computer user can then log in to the website to check to see if any of the e-mail messages that were filtered out are of value to the user.  The user then has the option of downloading e-mail messages from the bulk website inbox or deleting the message with all other unwanted bulk e-mail messages. 

To access e-mail on the Internet requires an e-mail program.  Many of these e-mail programs come with built in software filters that attempt to separate UCE from legitimate e-mail as defined by the user.  The sophistication of these programs also allows a user to define filters of their own to help curb the amount of UCE received.  These filters can consist of keeping a list of known UCE abusers as defined by the user and contain some advanced algorithms to help determine if an e-mail is UCE.  Once found the e-mail program will move those messages to a bulk inbox or have the messages deleted automatically.

One of the government agencies that has teamed up with users in an attempt to stem the tide of UCE is The Federal Trade Commission.  If a user has made attempts to stop UCE from a particular source and the user still receives UCE from this company, the user can forward the UCE to an e-mail address at the FTC.  The e-mail address to use is (Tillman, 15)

In testimony before the Subcommittee on Telecommunications, Trade and Consumer Protection of the House Commerce Committee, November 3, 1999, Eileen Harrington of the FTC's Bureau of Consumer Protection said, “The Commission has steadfastly called for self-regulation as the most desirable approach to Internet policy. The Commission generally believes that economic issues related to the development and growth of electronic commerce should be left to industry, consumers and the marketplace to resolve.”

The easiest way to stop unwanted UCE from filling up the inbox is to choose not to do business with those companies participating in UCE.  UCE has grown and proliferated at an astonishing rate because it has been successful.  With little or no cost and quick results, UCE has become another scourge to deal with on the Internet.  Consumers must find another way to obtain the product listed in the UCE.  Only when it is not profitable for UCE companies to continue with unethical practices will they adopt different practices and tactics.



While the abuse of UCE is rampant and currently costing society time and money, this avenue of valid advertising should not be completely legislated out of use.  Federal and state regulations combined with private enterprise initiatives by upstanding companies could eventually provide sufficient safeguards and controls to allow appropriate use of e-mail as a valid avenue of advertising.  However, even the European Union Commissioner conceded that the Web’s global nature makes a crackdown difficult. (Hancock, 18)  It will prove over time that the free enterprise system with its reliance on ethical business practices will ultimately enforce the use of said practices.  Those business entities failing to follow appropriate tactics will find themselves on the endangered species and extinct businesses list.

Refereed Resources

“Briefly Noted,” Communication Abstracts, Feb. 1997, Vol. 20 Issue 1, p 129.

Hancock, Bill, “E-mail Spammers Jailed,” Computers & Security, Jan 2001, Vol. 20 Issue 1, p 9.


Hancock, Bill, “Fighting Spam in Europe,” Computers & Security, Jan 2001, Vol. 20 Issue 1, p 18.


Hancock, Bill, “First Internet E-mail Corporate Usage Report; Concludes E-mail Abuse at Epidemic Levels,” Computers & Security, 1999, Vol. 18 Issue 3, p 188.


Hinde, Stephen, “E-mail Can Seriously Damage Your Health,” Computers & Security, 1999, Vol. 18, pp 396-408.


“No More Spam,” Journal of Property Management, Jan/Feb 99, Vol. 64 Issue 1, p. 8.


Kelin, Sabra-Anne, “State Regulation of Unsolicited Commercial E-mail,” Berkely Technology Law Journal, 2001, Vol. 16 Issue 1, p 435.


“Make big $$$$ on the Internet Collecting from spammers,” Educational Review, Sep/Oct 98, Vol. 33 Issue 5, p. 10.


Neumann, Peter G.; Weinstein, Lauren, “Spam, spam, spam,” Communications of the ACM, June 97, Vol. 40 Issue 6, p 112.


Samorski, Jan, “Unsolicited Commercial E-mail, the Internet and the First Amendment: Another Free Speech Showdown in Cyberspace?” Journal of Broadcasting & Electronic Media, Fall 1999, p. 670+.


Sheehan, Kim Bartel; Hoy, Mariea Grubbs, “Flaming, Complaining, Abstaining: How Online Users Respond to Privacy Concerns,” Journal of Advertising, Fall 99, Vol. 28 Issue 3, p. 37+.


Sikorski, Robert; Peters, Richard, “Jamming Spam,” Science, Jan 16 98, Vol. 279 Issue 5349, p. 413.


Sikorski, Robert; Peters, Richard, “A Privacy Primer for the Web,” Journal of American Medical Association, Apr 15 98, Vol. 279 Issue 15, p.1219+.


“Spam Report,” Communications of the ACM, Aug. 99, Vol. 42 Issue 8, p. 10.


Tillman, Bob, “Spamming Gets A Closer Look,” Information Management Journal, Mar/Apr 2002, Vol. 36 Issue 2, p. 10.



Other Resources

Feist, Sharael, “The Father of Modern Spam,” 2002. Online. Internet. 26 March 2002.  Available HTTP: