Alison
March 9th, 2006, 02:12 PM
This was in the Wall Street Journal today:
Google to Settle Ad Lawsuit,
Paying as Much as $90 Million
Clients Protested Charges
Run Up by Click Fraudsters;
Yahoo Is Still a Defendant
By KEVIN J. DELANEY
March 9, 2006; Page B3
Google Inc. said it agreed to pay as much as $90 million in legal fees and advertising credits to settle a lawsuit filed against it and other Internet companies last year alleging that the companies knowingly overcharged for online advertisements and conspired to continue doing so.
An attorney for the plaintiffs, Lane's Gifts & Collectibles LLC, a Texarkana, Ark., retailer, and Florida private investigator Max Caulfield, said they have asked the judge in the case to approve the proposed settlement. The proposal appears to essentially leave intact Google's defense of its handling of so-called click fraud and spare it from having to disclose further details of its ad system and antifraud measures in court.
Lane's Gifts & Collectibles attorney Stephen Malouf discusses the $90 million settlement in the Google "click fraud" case.The suit, originally filed in Circuit Court in Miller County, Ark., in February 2005, alleges that the search companies improperly charged the plaintiffs for fraudulent clicks. Click fraud occurs when someone clicks on online ads with ill intent.
Advertisers often pay Google and other Internet companies based on the number of times people click on their ads displayed alongside Web-search results and other online content. By clicking on the ads, or using software programs to automate the clicking, fraudsters can run up ad charges for rival advertisers or, in some cases, financially benefit themselves.
Under the proposed settlement, Google, based in Mountain View, Calif., would provide credits good toward ads on its system to Google advertisers who claimed to be victims of click fraud. Details of the exact claims and award processes and the amounts for individual awards proposed weren't disclosed. Google said the total value of the settlement, including the plaintiffs' legal fees, wouldn't exceed $90 million. It currently requires advertisers to apply for reimbursement for "invalid" clicks within 60 days of their occurring. The proposed settlement would allow any U.S. advertiser to make a claim for click fraud that occurred since 2002.
The proposed settlement is "a good outcome for everyone involved," said Google Associate General Counsel Nicole Wong in a statement on the company's Web site. George McWilliams, an attorney for the plaintiffs, said that "because the settlement is not final and must be approved by [the judge], we are not able to comment further about the details at this time."
Click fraud is an issue in the search industry partly because the search companies have declined to specify the scope of the practice and detail their efforts to combat it. Google Chief Executive Eric Schmidt told analysts last week that Google has staff and systems to guard against click fraud and that Google reimburses advertisers when such fraud slips through. "It is not a material issue for the company," he said.
Even if this settlement is approved, the Arkansas case will move forward against other defendants, including Yahoo Inc., that don't carry ads from Google.
A spokeswoman for Yahoo declined to comment on the proposed settlement, but said that "we stand firmly by our proprietary clicks protection system and look forward to vigorously defending our position in this matter."
Write to Kevin J. Delaney at kevin.delaney@wsj.com
Google to Settle Ad Lawsuit,
Paying as Much as $90 Million
Clients Protested Charges
Run Up by Click Fraudsters;
Yahoo Is Still a Defendant
By KEVIN J. DELANEY
March 9, 2006; Page B3
Google Inc. said it agreed to pay as much as $90 million in legal fees and advertising credits to settle a lawsuit filed against it and other Internet companies last year alleging that the companies knowingly overcharged for online advertisements and conspired to continue doing so.
An attorney for the plaintiffs, Lane's Gifts & Collectibles LLC, a Texarkana, Ark., retailer, and Florida private investigator Max Caulfield, said they have asked the judge in the case to approve the proposed settlement. The proposal appears to essentially leave intact Google's defense of its handling of so-called click fraud and spare it from having to disclose further details of its ad system and antifraud measures in court.
Lane's Gifts & Collectibles attorney Stephen Malouf discusses the $90 million settlement in the Google "click fraud" case.The suit, originally filed in Circuit Court in Miller County, Ark., in February 2005, alleges that the search companies improperly charged the plaintiffs for fraudulent clicks. Click fraud occurs when someone clicks on online ads with ill intent.
Advertisers often pay Google and other Internet companies based on the number of times people click on their ads displayed alongside Web-search results and other online content. By clicking on the ads, or using software programs to automate the clicking, fraudsters can run up ad charges for rival advertisers or, in some cases, financially benefit themselves.
Under the proposed settlement, Google, based in Mountain View, Calif., would provide credits good toward ads on its system to Google advertisers who claimed to be victims of click fraud. Details of the exact claims and award processes and the amounts for individual awards proposed weren't disclosed. Google said the total value of the settlement, including the plaintiffs' legal fees, wouldn't exceed $90 million. It currently requires advertisers to apply for reimbursement for "invalid" clicks within 60 days of their occurring. The proposed settlement would allow any U.S. advertiser to make a claim for click fraud that occurred since 2002.
The proposed settlement is "a good outcome for everyone involved," said Google Associate General Counsel Nicole Wong in a statement on the company's Web site. George McWilliams, an attorney for the plaintiffs, said that "because the settlement is not final and must be approved by [the judge], we are not able to comment further about the details at this time."
Click fraud is an issue in the search industry partly because the search companies have declined to specify the scope of the practice and detail their efforts to combat it. Google Chief Executive Eric Schmidt told analysts last week that Google has staff and systems to guard against click fraud and that Google reimburses advertisers when such fraud slips through. "It is not a material issue for the company," he said.
Even if this settlement is approved, the Arkansas case will move forward against other defendants, including Yahoo Inc., that don't carry ads from Google.
A spokeswoman for Yahoo declined to comment on the proposed settlement, but said that "we stand firmly by our proprietary clicks protection system and look forward to vigorously defending our position in this matter."
Write to Kevin J. Delaney at kevin.delaney@wsj.com