Bigreds Sees Red, Sues Yahoo for $1M
ADOTAS — Online retailer Bigreds.com has filed a $1 million lawsuit against Yahoo Inc. The online collectibles retailer said it knowingly used a pay-per-click service operated by Yahoo, but alleged it was overcharged by thousands of dollars because of click fraud Yahoo failed to stamp out.
Bigreds.com reportedly says it used Overture Services (acquired by Yahoo in 2003) between 2002 and 2006; the retailer was charged north of $936,000 by Yahoo’s search marketing unit based on clicks that Bigreds.com received on other sites affiliated with Yahoo and Overture.
The retailer claimed the sources of the affiliate-generated clicks were from Web site operators who wanted to boost their commission. Bigreds.com alleges that Yahoo and Overture were aware of the fraud in 2006 and failed to eliminate it, instead offering Bigreds.com $17,000 for clicks billed to the company in the spring of that year.
The suit was filed this month in the U.S. District Court for the Eastern District of New York. In 2005, Yahoo paid $4.5 million to settle a click fraud class action suit.
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