Google settles ‘click fraud’ suit

Wednesday, 13 Mar, 2006 0

Google has agreed to pay up to $90 million to settle a lawsuit contending it overcharged thousands of advertisers who paid for bogus sales referrals generated through “click fraud.”

The company announced the settlement would apply to all advertisers in Google’s network during the past four years.

“We’ve been discussing the case with the plaintiffs for some time and have recently come to an agreement with them which we believe is a good outcome for everyone involved,” said Google in its official blog site.

Any Web site showing improper charges dating back to 2002 will be eligible for an account credit to be used towards future ads distributed by Google.

The $90 million will not all be available because some will go towards paying fees to the lawyers filing the case in an Arkansas state court last year. The final settlement also requires court approval.

Yahoo, also named in the suit, told the Associated Press it planned to continue to fight the allegations.

The California-base Google makes the vast majority of its money from text-based advertising links that trigger commissions. But “click fraud” involves scam artists and other who click on links without any intention of buying.

The result: advertisers end up paying for worthless Web traffic.

The lawsuit was brought by Lane’s Gifts and Collectibles.

“The search marketing industry now has 90 million reasons to take click fraud more seriously,” wrote AdWeek.com.

They termed it an “ominous precedent” for the search industry in general.

Report by David Wilkening

David

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