Google to Settle in Click Fraud Case

Updated: The search engine says it plans to settle a class action lawsuit alleging that it conspired with competitors to inflate advertising rates. No word from Yahoo, another defendant.

Google says it has nearly settled a class action lawsuit alleging that the search engine charges inflated advertising rates because of rampant click fraud.

The search engine Ask, formerly known as Ask Jeeves, believes it, too, is covered under the proposed settlement, a spokesperson said.

Lawsuit defendant Yahoo plans to continue battling the accusations.

"We stand firmly by our proprietary click protection system, and look forward to vigorously defending our position in this matter," Yahoo said in response to news of Googles settlement.

The fate of other defendants is still unknown.

News of the pending settlement, announced March 8, could spur a spate of similar lawsuits filed by other Internet advertisers, and it may force Googles co-defendants to settle their part in the case.

Also, the proposed settlement casts a new spotlight on click fraud and its very costly ramifications for some of the Internets biggest firms.

The Google settlement isnt official until approved by the court where the suit is filed, the company said.

/zimages/1/28571.gifRead more here about the fight against click fraud.

But once settled, Google plans to field click fraud complaints from any advertiser dating back to 2002, when Google began charging advertisers based on the number of times an Internet browser displayed their ad, Google General Counsel Nicole Wong writes.

Usually, Google sets a 60-day limit to file a click fraud complaint.

She adds that the company doesnt know how many advertisers will apply for credits, nor the total amount Google expects to reimburse.

"But the total amount," Wong goes on to explain in a statement provided by Google, "including the legal fees determined by the judge, will not exceed $90 million."

Additional details of the settlement are confidential, for the time being.

/zimages/1/28571.gifRead more here about the history of click fraud issue.

Google and other top Internet firms were named in a suit filed last February by Texarkana, Ark.-based retailer Lanes Gifts & Collectibles, and other Internet advertisers.

The suit alleges that the firms charged advertisers improperly because marketers, spammers or other black hats artificially inflate the number of times a Web site is visited.

Known as click fraud, the problem is so widespread it skews Internet traffic by up to 50 percent, a recent study suggested.

Editors Note: This story was updated to include comments Yahoo and Ask, defendants in the lawsuit.

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