MediaPost.com is reporting that Microsoft has “been hit with a potential class-action lawsuit for allegedly overcharging marketers for pay-per-click ads”.
The suit was filed Wednesday in a federal court in Seattle by Lane’s Gifts and Collectibles, “steaming from ads that Microsoft allegedly served on parked domains and “errors” pages”.
“Web users tend to reach those sites by accident, after mistyping the addresses of sites they intend to visit.”
“Lane’s Gifts says in its complaint that it agreed to pay up to 30 cents per click when the company appeared in search results, but says it agreed to a maximum of just 5 cents per click when ads appear in sites within the “content network” — where Microsoft serves ads that match keywords in a page’s content”.
“Lane’s Gifts alleges that it was charged the higher search-results price for ads that were served on parked domains and error pages.”
“The company says it should have been charged the content-network rate for those ads. Lane’s Gifts also alleges that Microsoft misreported content-network ads as search ads.”
Lane’s Gifts is seeking to represent a class of all search marketers who were “charged an amount higher than the advertiser’s maximum bid.”