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Click Fraud Clocks Google: Eyeing the Impending Litigations Facing the Online Giant

Written on
May 15, 2006 
Author
Jordan Glogau  |

Do you think that people are too ready to sue each other in this country? That’s positive thinking, but the reality is that in the good old USA, litigation is business by any means. So, it was inevitable that the click fraud issue would end up in the courts.

Yes indeed, click fraud is now a court issue; there are now three interrelated lawsuits affecting one online giant: Google. First, there is the case that got filed filed in Arkansas, Lane’s Gifts. Second, is AIT, a case that got filed in California. Then there is the most recent case Kinney vs. Lane. This third case is quite a twist. It’s a suit against the plaintiffs that filed the first lawsuit in Arkansas, claiming that they aren’t fairly representing all the Google advertisers and that the settlement the plaintiffs agreed to is a bad deal.

Let’s start with the first suit: Lane’s Gifts. When the case began, both Google and Yahoo argued that the case should be dismissed because it was in the wrong venue, which means the suit was brought in the wrong location. If you look at your Google contract, it likely says that you have to sue them in California, and no other location. To quote the Terms and Conditions, it says the contract is “governed by California law . . . and adjudicated in Santa Clara County, California.” Bringing a case in the wrong venue when the contract specifies the venue usually means the case automatically gets dismissed.

But this first case in Arkansas went forward while a motion to dismiss the case, based on the venue provision, was getting scheduled. Someplace midstream, Google and the lawyers for Lane came to terms. There’s nothing a judge likes better then when the two parties come to terms; it’s off his docket. But these are the terms of the settlement:

1. Based on the amount of money that Google has made over the last 4 years with AdWords, the settlement comes down to less then ½ cent on the dollar. What this really means is that the small advertiser has almost no chance at some sort of reasonable recovery. It simply isn’t worth the effort.

2. If you decide to apply for a fraud refund guess, who gets to decides if the claim is legitimate? Google is the final judge and jury.

3. If Google decides that you merit a refund, it isn’t for cash. You get a credit against your future ad spend. That’s good; it will partially cover future click fraud which most experts put in the 14 to 30 percent range.

4. It brings us up the last point, which is that there is no guarantee that Google will help stop click fraud moving into the future. Welcome back to court because you’re not getting any relief.

So why did Google change its mind and decide to settle in Arkansas? That is simple, the terms are totally one-sided in Google’s favor. Because Google was about to have the case against it dismissed based on the fact that it was in the wrong venue, it forced Lane’s Gifts’ lawyers into a bad deal. Google’s lawyers figured they could give a small amount of cash to these lawyers and limited refunds to the advertisers. If you’re saying to yourself that 30 million dollars is a lot of money, it is–for the lawyers. But where does that leave the advertisers, who had billions of dollars in possible losses and will continue to have them moving into the future?





Jordan Glogau has been involved with marketing and sales on the Internet since 1995. He has worked for a number of computer and Internet company like DEC, Sharp and IDT and presently at Haiku-Marketing.com. Jordan is involved in Search Engine and Internet Marketing for ecommerce, healthcare, real estate, financing, consumer products and reputation management . He can be contacted at jglogau atphr400.com .

Reader Comments.

I hope the Congressional hearings take place, and I want to see/hear
what the Google execs say when questions are put to them such as why
they didn’t understand the threat of click fraud when AdWords and
AdSense were launched. It isn’t as if click fraud was new; there were
ad fraud schemes dating back into the mid-1990′s. More to the point,
there is a body of knowledge known to all Internet protocol engineers
and architects regarding the ability to easily fake and manufacture
traffic sent in IP packets.

Posted by CPCcurmudgeon | 6:12 pm on May 23, 2006.

Our law firm spends over 100k per year at Google, and we DO NOT think the settlement is a good deal. We are opting out, and will likely sue Google on an individual basis. We are also investigating whether we want to also represent other advertisers who wish to opt out.

If your company has spent a substantial sum at Google.com (over USD $100k), we would like to speak with you if you are interested in suing Google. We take no fees until and if we win your case, or settle.

Please email me at seamless.com@gmail.com.

k

Posted by Kevin T. | 1:53 pm on May 24, 2006.

FuckedGoogle.com

I found and interesting blog about FuckedGoogle.com. It made me laugh out loud. Try the link below:

http://www.light-speed-web-graphics.com/fuckedgoogle/fuckedgoogle_review.htm

Posted by bob2001 | 11:52 pm on June 16, 2006.

I have attempted to use adwords on several occasions and when it came to the bid section it would show the minimum accepted bid of lets say $0.01 so I would raise that amount to $0.03.

Google accepted my bid but within hours my keywords were inactive for a larger bid amount. They were increased to $0.05 a click so I went into each of them and again raised my bid to what they claimed was the accepted bid amount they wanted. The next day I would check out how my key words are doing only to find all my keywords again were inactive and now Google wanted a minimum bid of $0.25 a click to as much as $10 a click.

Isn’t this clearly a bait and switch fraud? Google first agrees to one price, then they change the price once you begin, and continue to raise your price right out of the market place by the majority of small business owners? Yet they keep your money for so called clicks where you can not find any clicks to your site?

Google needs to be sued big time, not a measly $90 Million either, but for $3+ Billion. They are like any other scam artist out here, if they make millions and only have to pay pennies on the dollar, do you really think that con artist is going to stop their scam. Why would they stop? It is to profitable for them to stop ripping people off.

I feel Google, Yahoo should all be prosecuted like a common person and their officers thrown in jail and all their assets seized with minimum fines of Billions will be the only way to stop them from ripping people off.

Posted by Douglas Weare | 6:02 am on June 27, 2007.

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