According to the Wall Street Journal, Microsoft filed a lawsuit on Monday against three people they allege committed a form of “click fraud” by improperly manipulating Microsoft’s online advertising service for profit.
Microsoft filed the suit in federal court in Seattle against Eric Lam, his mother Melanie Suen and his brother Gordon Lamand all of Vancouver and several corporations under their control. The suit seeks at least $750,000 in damages alleging that the three engaged in the scheme last year to drive up advertising costs for legitimate Microsoft advertisers while creating an advantage for the defendants’ own businesses.
Microsoft alleges that the defendants engaged in “competitor click fraud,” by exhausted a competitor’s advertising budget while boosting the prospects of their own advertisements making made more than $250,000 in profits through the scheme.
This is one of the first cases I have seen where someone has been sued for “click fraud”.
As more and more suits are filed against search engine for their conduct of PPC advertising, expect the search engines to file more of these type suits.
Honestly, I think click fraud is a whole lot higher than everyone wants to think it is and I’m sure this goes on far more often than people think. Heck, who’s to say people at the search engines aren’t doing it themselves?
When they refer to competitor click fraud, I take it they mean clicking on the competitor’s ads over and over again? I would have thought they’d have mechanisms in place to detect and deal with that. I guess it doesn’t say how much fraud occured and merely the damages being sought however if the click fraud is anywhere near $750,000 in total, I have a hard time seeing how someone could make that many fraudulent clicks before it being detected.
If the general public ever grasps the concept of paid ads, I have a feeling click fraud is going to go up substantially.
Click Fraud is still big business for some people – I hope this sets the tone and Microsoft win!
This shall hopefully help in our fight to give domainers a better name and get rid of the Fraudsters.
Regards,
Rob
Good for Microsoft. These people should be sued and made to pay.
There is no question that click fraud occurs in high volume to this day. Just think of the times when you’ve accidentally clicked on an advertisement, because the publisher places the ad in an awkward location. IMO that does not drive the traffic an advertiser is paying for.
As an active advertiser with Adwords and Live Center I’m glad “someone” is doing something in regards to click fraud, it’s just a joke these days that conversion rates go down while the click costs go up. A+ Microsoft!
owned.