Commentary: Now Spam Is Being Outsourced

Spammers are flocking to Korea and China. Will governments take action?

Everyone knows that China and South Korea have become export powerhouses for everything from baseball gloves to semiconductors. But watch out, world: The Asian powers are fast becoming major exporters of an item you don't want to import -- Internet spam. In early September, Chinese officials were scheduled to hold an antispam summit in Beijing with top executives from some of America's biggest Net companies, including America Online Inc. (TWX ), eBay (EBAY ), Yahoo!, and Microsoft. With reason: More than 25% of the junk e-mail sent around the globe now originates from servers in China and South Korea. "It won't be long before China produces the same amount of spam as the U.S.," frets York Ma, chairman of the Hong Kong Internet Service Providers Assn.

This is one export Asia -- especially China -- has to curtail fast. If not, it could endanger the security of the global Net. Junk e-mail dangerously clogs the cyberways, of course. Net executives worry, too, that spammers using China as a base will team up with hackers and virus writers, which would be "very destructive," says Li Boda, e-mail manager at Chinese portal (SOHU ).

What's frustrating to many companies is that governments have been slow to react even as Asian spam has been growing explosively. A survey by Sophos PLC, a British Internet security firm, found that between February and August of this year, the flow of junk e-mail coming out of China and Hong Kong almost doubled, from 6.24% of the global output to 11.63%, while the amount from South Korea went from 5.8% to more than 15%.

Some spam conveyors are renting servers in China, but others are remotely hijacking Asian PCs without their owners' knowledge to use as vehicles for transmitting billions of e-mails. Spam artists are moving operations to Asia to avoid a crackdown in the U.S. Internet service providers such as AOL (TWX ) and EarthLink Inc. (ELNK ) have filed suits against spammers. The so-called Can Spam Act, which took effect in January, has erected new legal hurdles. "As crackdowns are happening in the U.S., spammers are going offshore," says Gregg Mastoras, senior security analyst at Sophos. "Mostly it involves being in an environment where nobody is going to come shut you down."

Why Asia? South Korea has the world's most advanced broadband infrastructure, allowing spammers to take advantage of its high-speed connections. And China, while it boasts fewer broadband hookups, is largely unregulated. "China is a safe harbor for spammers," says Andy Lake, director of sales and operations for Greater China and Southeast Asia for MessageLabs, the British e-mail security company. "There's not a lot of control over the infrastructure." Asia's rise as a spamming center is drawing the attention of industry big guns. "What we really need to do is agree across all nations what are the areas that are wrong no matter where you are," says Ryan Hamlin, general manager for antispam technology and strategy at Microsoft Corp. (MSFT ). Asian governments are getting the message, partly due to Microsoft and others, and partly because spam is starting to be a problem for local users as well. Seoul regulators plan to propose antispam legislation this fall that includes fines of up to $26,000 for offenders: More than 60% of all e-mail messages received by Internet users in Korea are spam. China's Ministry of Information Industry announced in July that the government was drafting new legislation. "China is now much more security-aware," says Peiyin Pai, a senior manager for Computer Associates International Inc. (CA ).

Will the new initiatives end the threat of spam from the East? "China alone cannot fight spam," says Li Yuxiao, head of the antispam group at the Internet Society of China. Spam is a global blight, one that the West hasn't figured out how to address either. But making it hot for spammers in Asia will certainly help. Free trade in spam is the last thing the world needs.

By Bruce Einhorn With Chen Wu in Hong Kong, Brian Grow in Atlanta, and Moon Ihlwan in Seoul

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