Third Time's a Charm? Google Sued for Click Fraud (Again)
Google, fresh from its $90 million settlement, is being sued for click fraud in another class action lawsuit, this one filed in Pennsylvania federal district court, Google Watch has learned.
The proposed class action -- the third this year -- was filed on behalf of several hundred Pennsylvania and New Jersey residents, and accuses Google of exposing publishers to click fraud following a breach of contract, negligence, unjust enrichment and unfair business practices.
"Google made a settlement that was ridiculously unfair to publishers, and anyone who was involved should be appalled," said Samuel Lassoff, attorney for the plaintiffs in the new lawsuit, and himself a publisher who used Google AdSense, referring to the $90 million settlement. "I still think a lot of businesses don't even know they were defrauded."
Echoing previous statements about click fraud, a Google representative said Google takes the issue of invalid clicks very seriously. "We've dedicated expert engineers to it and believe that the problem is small and that we manage it well. This lawsuit is without merit and we will defend against it vigorously."
Lassoff, who was not part of any previous class action lawsuits, said he filed the class action complaint on behalf of Pennsylvania and New Jersey residents because he's a licensed attorney in both states. The complaint covers the time period of October 2005 to February 2006.
"I was attacked by other competitors," Lassoff said, adding that his business -- which includes coupons-and-promotions.com and winatshopping.com -- was defrauded of several hundred dollars due to click fraud. "Google could probably care less. Everything's automated, 24/7. They rack up ad dollars all week long and don't even need to rest."
There are currently no other plaintiffs involved in the class action, but Lassoff said he believes there are "anywhere from fifteen to a thousand people who aren't aware or who opted out of previous settlements."
Lassoff said he filed the class action when it became apparent that Google had no intention of responding to his complaints about click fraud. Lassoff said he e-mailed and phoned Google several times, but that Google never responded.
Google has yet to respond to this class action complaint, but the complaint was only filed in court August 10. Lassoff said he was also defrauded by Yahoo and Ask.com, but that the majority of fraud occured with Google's AdSense. He said he "hasn't gotten around" to suing Yahoo and Ask yet.
Third-party monitoring services estimate that click fraud currently accounts for about 15 percent of all clicks on contextual ads.
But Rick Miller, principal of online marketing firm Brulant, said his clients haven't been experiencing high levels of click fraud, or seen click fraud problems increase. "What I've found is more of an issue, actually," said Miller, "was not click fraud but competitors poaching our brand names to use in AdSense."
Google recently fought back against allegations that it does not combat click fraud. In a recent post on Google's company blog, Shuman Ghosemajumder, Google's business product manager for Trust & Safety, said third-party estimates of click fraud are inaccurate. However, Google does not release its click-fraud accounting methodology "because doing so would make it easier for fraudsters to try to defeat our systems."
Google CEO Eric Schmidt, speaking at the Search Engine Strategies conference in August, said Google will eventually release more data on click fraud.