Spam Email Costs Billions But Yields Far Less

Most of us hate unsolicited commercial email – aka spam. Notwithstanding spam filters and federal and state laws prohibiting spam under various circumstances, we nonetheless continue to receive these annoying emails in our in boxes.

One might think that the spammers are making fortunes as part of their predatory practices.

But a recent study indicates that while the societal cost of spam is phenomenally high, to the tune of $20 billion, the revenue derived from spam is a fraction of that, only $200 million.

The study, titled The Economics of Spam and published by Justin Rao of Microsoft and David Reiley of Google in the Journal of Economic Perspectives, notes that American firms and consumers yearly suffer costs of about $20 billion as a result of spam. The study points out that this estimate is less than the $50 billion price tag suggested by others, but it adds that the number would be much higher without anti-spam technology that does reduce the impact of spam.

The study also finds, based on the infiltration and monitoring of spammers’ conduct, that spammers globally collect revenues of $200 million. This means that ratio of external costs to internal benefits is 100:1. Thus, the harm caused to others far outweighs the benefits to the spammers.

Does this mean that spammer will stop? Of course not.

Spammers care about the benefit to them, not the harm caused to others. If this were not the case, spamming already would have ceased to a large extent.

So, hopefully spam filters will trap most spam while not blocking legitimate email. And, let’s cross our fingers that federal and state anti-spam laws will help hold spammers in check. But while filters and the laws have had some success, plainly spam still reaches our in boxes. It may be a part of life for the foreseeable future.

Eric Sinrod is a partner in the San Francisco office of Duane Morris LLP ( where he focuses on litigation matters of various types, including information technology and intellectual property disputes. His Web site is and he can be reached at To receive a weekly email link to Mr. Sinrod’s columns, please send an email to him with Subscribe in the Subject line. This column is prepared and published for informational purposes only and should not be construed as legal advice. The views expressed in this column are those of the author and do not necessarily reflect the views of the author’s law firm or its individual partners.

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The opinions expressed on this blog are those of the author and are not to be construed as legal advice.

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