COURT RULINGS GIVE AOL THREE NEW VICTORIES IN THE BATTLE AGAINST JUNK E-MAIL

Company Files Nine New Lawsuits in Five States Targeting Porn Spammers, Get-Rich-Quick Schemers, and Junk E-Mail Software Distributors

DULLES, VA, December 21, 1998 -- America Online, Inc. (NYSE: AOL) today announced that it has won three lawsuits brought against junk e-mailers as part of the Company's continuing effort to protect AOL members from unwanted junk e-mail. In each of these victories, the court awarded AOL substantial monetary damages. And, for the first time in one case, the Court applied federal and state computer fraud statutes recognizing that existing computer fraud statutes apply to the transmission of falsified e-mail.

AOL has also has filed nine new lawsuits in five states - California, New York, Iowa, Florida and Virginia - targeting porn-spammers, get-rich-quick schemers and sellers of spamming software. The suits were brought against spammers whose mailings had all resulted in complaints from AOL members.

"These legal victories underscore the court's recognition that junk e-mail damages both our members and AOL," said Randall Boe, AOL's Associate General Counsel. "They also deliver a strong message: AOL will not tolerate junk e-mail on its network and will take every legal step necessary to respond to our members' complaints and protect their online experience. The weight and authority of the law are clearly on the side of AOL and our members, who have made it plain that they do not like or want unsolicited junk e-mail."

Three Legal Victories

AOL vs. LCGM, Inc. (Madison Heights, MI)

LCGM, a well known spammer for pornographic web sites, was ordered by the court to pay AOL damages and costs, including attorney's fees, for sending millions of pieces of junk e-mail to AOL members. The Court also ordered LCGM to cease its transmission of junk e-mail to AOL members. The Court noted that in the course of sending this junk e-mail, LCGM had also violated the AOL's trademark through its use of the AOL.com domain name.

Most significantly, the Court also ruled that LCGM, by employing methods and software designed to defeat AOL's spam filtering technologies, had committed fraud. The Court therefore applied both state (VA) and federal computer fraud laws. This first-time-ever application of these statutes in an anti-spamming case breaks new ground in this area of the law and provides AOL and other Internet or online service providers with a new weapon in the fight against spam.

Filed in the U.S. District Court for the Eastern District of Virginia

AOL vs. Prime Data Systems (Bowling Green, Kentucky)

The Court ordered Prime Data, and its principal operator Vernon Hale, to pay damages to AOL for the costs of handling millions of pieces of junk e-mail sent by Prime Data to AOL members. The court also noted that the "malicious" nature of the defendant's conduct warranted punitive damages triple the amount of the actual damages. Further, the Court determined that Prime Data and Hale had violated AOL's trademark rights and, as a result, awarded AOL attorney's fees. The court also provided AOL with permanent injunctive relief barring Hale and Prime Data from ever again sending e-mail to AOL or its members.

Filed in the U.S. District Court for the Eastern District of Virginia

AOL vs. IMS, et. al. (Knoxville, TN)

In a previous ruling, the case against IMS yielded the first-ever judicial opinion finding that "AOL.com" forgery violates federal trademark statutes. In bringing this case to a conclusion, the Court ruled against IMS, its principal Joe Melle and two other spammers: Brian Robbins, a spammer advertising a dubious "credit repair" scheme, and Neil Byron Goodson, a Louisiana-based seller of "Floodgate" spam software.

The Court found each liable for actual damages and imposed triple punitive damages. The Court also provided AOL with injunctive relief and barred the defendants from ever again sending e-mail to AOL or its members as well as barring them from using the AOL service for any reason.

Filed in the U.S. District Court for the Eastern District of Virginia

Nine New Lawsuits Filed in Five States

In a sweeping new phase in its effort to protect AOL members from junk e-mail, AOL today announced that it has brought lawsuits against nine well-known spammers in five different states - Virginia, Iowa, Florida, California and New York.

Regarding these newly filed lawsuits, Boe said, "We want spammers everywhere to know that we will find you and come after in you court. We want our members to know is that we will continue to be aggressive on their behalf and in defending their online experience."

The cases filed by AOL today are listed below by state:

Virginia

Power Promo and Forrest Dayton (Marietta, GA): AOL has brought suit against Power Promo and Mr. Dayton not only for their prolific spamming activities, but also for their selling of the "Stealth" software program, which encourages and enables junk e-mailers to evade the technological blocks and filtering software AOL and others use to block spam. AOL is also seeking to hold Power Promo accountable for its manufacture and distribution of junk e-mail software.

Filed in the U.S. District Court for the Eastern District of Virginia

GreatDeals.Net (Reston, VA): GreatDeals.Net is a seller of computer hardware. Despite having received a cease and desist request from AOL, GreatDeals.Net has continued to send junk e-mail to AOL members. AOL is seeking damages and an end to spam sent from GreatDeals.Net.

Filed in the Fairfax, Virginia County Court

California

"Virtual Girlfriend" Spammer (Sunland and Tujunga, CA): This suit targets a ring of spammers that defrauds consumers who attempt to purchase the advertised software package. The same defendants have also been connected with various fraudulent activities associated with AOL members' accounts.

Filed in the U.S. District Court for the Southern District of California

Michael Persaud, et. al. (San Diego, CA): This suit alleges that Persaud, operating under the names J.Butterfield, Henry Summers and Brian Crawford has sent millions of pieces of junk e-mail to AOL members despite a cease and desist request. Additionally, Persaud is alleged to have systematically and fraudulently abused the AOL.com domain name and trademark.

Filed in the U.S. District Court for the Southern District of California

USA Home Employment (Studio City, CA): USA Employment has been identified as a spammer of "get-rich-quick" envelope stuffing schemes. Despite a cease and desist request by AOL, this spammer has continued to send junk e-mail into the AOL system and to AOL members.

Filed in the U.S. District Court for the Central District of California

Iowa

National Health Care Discounts, Inc. (Sioux City, IA): The suit alleges that this corporation uses spammers to generate sales leads by deluging AOL members with messages promoting NHCD's health insurance products. AOL's suit alleges that the junk e-mail itself fails to identify either the actual sender or NCHD, on whose behalf they are acting. NCHD has ignored repeated requests to stop the sending of junk e-mail to AOL and its members.

Filed in the U.S. District Court for the Northern District of Iowa, Western Division

Florida

Global Marketing Solutions, Inc. (Orange County, FL): This suit targets a spammer of junk e-mail and purveyor of "Guaranteed….$10,000 cash loan!" program. Global Marketing has also engaged in deceptive and fraudulent practices calculated to avoid AOL's attempts to filter and block junk e-mail.

Filed in U.S. District Court for the Middle District of Florida

First Class Advertising (Valusia and Orange County, FL): This suit targets a bulk e-mailer responsible for sending AOL members junk e-mail advertising the sale of "Beanie Babies" and bulk e-mail services. First Class has also engaged in deceptive practices calculated to avoid AOL's junk e-mail filtering and blocking systems despite repeated requests from AOL to cease and desist.

Filed in U.S. District Court for the Middle District of Florida

New York

The Christian Brothers (Brooklyn, NY): AOL alleges that this spammer has persistently used junk e-mail to advertise a "miracle cancer cure" (apricot seeds). This company is also alleged to have fraudulently generated junk e-mail using the AOL.com address creating the false impression that these e-mails have either been sent by AOL or endorsed by AOL.

Filed in the U.S. District Court for Southern District of New York

About America Online, Inc.

America Online, Inc., based in Dulles, Virginia, is the world's leader in branded interactive services and content. America Online, Inc. operates two worldwide Internet services: America Online, with more than 14 million members; and CompuServe, with approximately 2 million members. America Online, Inc. also operates AOL Studios, a leading builder of Internet brands for new market segments. Other branded Internet services operated by America Online, Inc. include AOL.COM, the world's most accessed Web site from home; Digital City, Inc., the No. 1 branded local content network and community guide on AOL and the Internet; AOL NetFind, AOL's comprehensive guide to the Internet; AOL Instant Messenger, an instant messaging tool available on both AOL and the Internet; and ICQ, an instant communication and chat technology on the Internet.