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Google Click Fraud Settlement: $90 Million

David A. Utter
Staff Writer
Published: 2006-03-08

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A class-action lawsuit filed by Lane's Gifts and Collectibles in Arkansas against Google could end soon if the presiding judge approves a proposed settlement.

Google provided an update in its year-plus battle with Lane's Gifts over accusations of the search advertising company charging businesses for fraudulent clicks on paid search advertisements.

Should the settlement be approved, Google will change the window of time where advertisers can apply for reimbursement of clicks they contend were not legitimate:

They can do this for clicks that happen during the 60 days prior to notifying Google. Under the agreement with the plaintiffs, we are going to open up that window for all advertisers, regardless of when the questionable clicks occurred. For all eligible invalid clicks, we will offer credits which can be used to purchase new advertising with Google. We do not know how many will apply and receive credits, but under the agreement, the total amount of credits, plus attorneys fees, will not exceed $90 million.

This agreement covers all advertisers who claim to have been charged but not reimbursed for invalid clicks dating from 2002 when we launched our "cost per click" advertising program through the date the settlement is approved by the judge.

Danny Sullivan reported more details based on his conversation with Steve Malouf, a plaintiff's attorney working on the case:

Why Settle? Given Google's overall revenue, along with some high estimates of click fraud, why not fight for more? "Within the context of the risk that each party faces of losing, it was a reasonable settlement," Malouf said.

Protection From Click Fraud Going Forward: What's going to prevent future cases like this? Malouf said it was a combination of giving more data to advertisers along with more third-party assistance.

"They could all do a better job in terms of transparency and providing a more robust data set to perform analytics," Malouf said. "The solution going forward is going to be an industry solution, with transparency in the form of a third party or several third parties to help advertisers with auditing."


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About the Author:
David Utter is a staff writer for WebProNews covering technology and business.

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