Google Offers To Settle Click Fraud Allegations

by Glen Shapiro, LawAndTax-News.com, New York

10 March 2006

It emerged this week that online search portal, Google has proposed a settlement agreement with advertisers who feel that they have been the victims of 'click fraud'.

The search firm usually charges advertisers (who have their adverts displayed alongside relevant search results) based on the number of times that users click on their link. However, rival firms can fraudulently increase advertising costs by repeatedly clicking on the advertisement.

The advertisers in question have argued that Google knew about such practices, and knowingly overcharged them for the false clicks.

However, writing on Wednesday in the official Google blog, Nicole Wong, Associate General Counsel announced that:

"We’ve been discussing the case with the plaintiffs for some time and have recently come to an agreement with them which we believe is a good outcome for everyone involved. As a result, Google and the plaintiffs are going to ask the judge to approve the settlement, which would resolve the case."

"Until the settlement is approved by the judge, it is not final. And the details are confidential, but will become public when it is formally filed for the judge’s consideration. However, we can share the major pieces of our proposed agreement."

Google currently allows advertisers to apply for reimbursement for clicks they believe are invalid. They can do this for clicks that happen during the 60 days prior to notifying Google.

Under the agreement with the plaintiffs, Google has stated that it intends to open up that window for all advertisers, regardless of when the questionable clicks occurred.

Ms Wong went on to add that:

"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."

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