Google Settles Click Fraud Class Action

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

01 August 2006

Online search portal, Google announced last week that a $90 million settlement agreement has been reached relating to its failure to prevent 'click fraud' from occurring.

Click fraud is often perpetrated via an automated program, set up by companies to fraudulently click on their rivals' advertisements. As a fee is paid to Google every time an advert is clicked on, this serves to run down advertising budgets.

The class action against Google, led by Lane's Gifts and Collectibles, alleged that the search firm did little to prevent such fraudulent activity from taking place.

In a statement published last Thursday on the company's official blog, Google's Associate General Counsel, Nicole Wong announced that:

"We know many of you have been following the Lane's Gifts v. Google case, so we want you to know that Judge Joe Griffin ruled today to approve the proposed settlement...We're pleased Judge Griffin has affirmed the settlement as appropriate and fair to advertisers."

"We look forward to continuing to manage invalid clicks effectively and provide our advertisers with an outstanding return on their investment."

According to reports, the payout will return to affected advertisers $4.50 from every $1,000 of advertising purchased.

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