A Suppression List is a list of suppressed e-mail addresses used by e-mail

E-mail

Electronic mail, commonly known as email or e-mail, is a method of exchanging digital messages from an author to one or more recipients. Modern email operates across the Internet or other computer networks. Some early email systems required that the author and the recipient both be online at the...

 senders to comply with the CAN-SPAM Act of 2003. CAN-SPAM requires that senders of commercial emails provide a functioning opt-out mechanism by which email recipients can unsubscribe their email address from future email messages. The unsubscribed email addresses are placed into a "suppression list" which is used to "suppress" future email messages to that email address.

Abuse

A suppression list contains valid email addresses. Suppression list abuse occurs when a third party takes a suppression list and emails messages to the email addresses in the list. The original sender of the email messages who provided the opt-out mechanism may be liable for suppression list abuse.

Additionally:
Suppression files are to be used when you are emailing a particular campaign. Email address in suppression list are NOT to be included while emailing, those people have chosen not to receive emails for that product.
Alternately, in terms of email marketing, Suppression list contains email IDs that have already chosen to OPT-OUT from getting email updates of that particular product.

Protection and tracking

A variety of technological means are used to protect suppression lists and track suppression list abuse. These include neutral third party scrubbing of email lists, distribution of MD5

MD5

The MD5 Message-Digest Algorithm is a widely used cryptographic hash function that produces a 128-bit hash value. Specified in RFC 1321, MD5 has been employed in a wide variety of security applications, and is also commonly used to check data integrity...

 secure hash

Cryptographic hash function

A cryptographic hash function is a deterministic procedure that takes an arbitrary block of data and returns a fixed-size bit string, the hash value, such that an accidental or intentional change to the data will change the hash value...

suppression lists and distribution of "seeded" email lists.