Microsoft has fired a warning shot at online advertising fraudsters with a $750,000 lawsuit against three individuals who allegedly directly bilked advertisers and indirectly deprived Microsoft of potential online advertising revenue through click fraud.
In a June 15 blog post, Tim Cranton, associate general counsel at Microsoft, said the click fraud attacks occurred on online advertisements related to auto insurance and the World of Warcraft online role-playing game.
In his post, Cranton said:
""Earlier today, after a thorough investigation, Microsoft filed a civil lawsuit in the U.S. District Court for Western Washington outlining a massive click fraud scheme believed to have impacted Microsoft's advertising platform and potentially other networks. The case is Microsoft v. Lam, et. al., case number 09-cv-0815.""
This lawsuit is Microsoft's first aimed at click fraud. Specifically, the lawsuit charges Eric Lam, Gordon Lam and Melanie Suen, of Vancouver, British Columbia, as the perpetrators of the fraud. Eric and Gordon Lam are said to be brothers, and Melanie Suen is believed to be their mother.
In Cranton's description, "Click fraud occurs when a person, automated script or computer program imitates a legitimate Web surfer and clicks on an online ad for the purpose of generating a fraudulent 'charge-per-click' without having actual interest in the target of the ad's link."
Cranton said Microsoft's Internet Safety Enforcement Team, which he has led for 10 years, has evolved beyond its focus on "'classic' cybercrime issues such as child protection, security, malicious code and online fraud" and is expanding its effort to "tackle a less traditional but increasingly crucial area for cybercrime enforcement: Click fraud and related threats to the online advertising community."
Despite having the appearance of a mom-and-pop, nuisance case that Microsoft could easily do away with, the Lam case represents a "significant" issue, Cranton told the New York Times, which interviewed him for an article. And the company is out to make a point.
According to the New York Times, Cranton said:
""We think there's a good place for enforcement, basically to say, -You think this is a game, cat and mouse, back and forth. At some point, once we figure out who you are, we're going to hold you accountable for it, it's going to be expensive, and we're going to deter you from doing it because you're ripping off advertisers and people online.'""
Moreover, in his blog post, Cranton noted, "Once we became aware of the click fraud attacks we quickly took action to address any impact on advertisers and to enhance safeguards to further protect our network. Today's suit seeks an injunction to help stop this activity and to recover damages."
According to reports, although it is seeking a minimum of at least $750,000 in damages, Microsoft has had to credit back $1.5 million to advertisers because of the alleged fraud.