$90M Click Fraud Settlement in Google Advertisers' Hands

By Ben Charny  |  Posted 2006-05-22 Print this article Print

Google has begun notifying its AdWords advertising clients about the recent $90 million settlement of a click fraud lawsuit, signaling the start of the month-long period in which advertisers can seek to claim a piece of the money.

The notices come via e-mail, have in the subject line "Important Legal Notice Regarding Your Google AdWords Account," and are from the e-mail address clicksettlement@xmr3.com. Recipients have a deadline in which to reply. Google's making more settlement info available at this site.

The hubbub is over a lawsuit filed in a Texarkana, Ark., circuit court by local retailer Lane's Gifts & Collectibles, which was a Google advertiser.

The firm accused Google and other top Internet companies of improperly charging advertisers. The suit is a class action, and plaintiffs represent any Google advertiser from 2002.

The litigation seeks compensation for click fraud, which, loosely defined, is when marketers, spammers or other black hats artificially inflate the number of times a Web site ad is clicked on, thus improperly increasing Google's ad revenues. Advertisers pay Google a fee every time their ads are clicked on.

Meanwhile, Google executives have claimed as recently as April 10 that click fraud isn't a problem at Google.

There's anecdotal evidence suggesting that hundreds of Google advertisers will object to Google's proposed settlement, according to attorney Brian Kabateck, who is representing another business suing Google for alleged click fraud.

Kabateck cited as evidence the hundreds of downloads of a form letter he's published in which people reject the settlement, plus the scores of e-mails his office has received from Google advertisers.

He said he believes that when compared to how much Google allegedly overcharged, the entire $90 million settlement doesn't work out to anywhere near enough compensation per advertiser.

Some advertisers have been allegedly overpaying by tens of thousands of dollars, but will only get a few hundred dollars back as a result of the settlement, Kabateck said.

The $90 million is "manifestly deceptive in size, scope and effect," his law firm wrote in a letter to the judge in the case.

As to California suit, Google wrote in a statement that "lawyers for the California plaintiffs have been trying in a variety of ways to circumvent the normal class action process, which we believe is inappropriate. We question if their actions may be motivated more by the quest for attorneys' fees than pursuit of what's best for class members."

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