On June 24, 2005, Click Defense, a company which provides
software to keep track of Pay-Per-Click advertising, sued Google Inc. in
the US District Court in San Jose, claiming that the search engine
has failed to protect users of its advertising program from
"click fraud," costing them at least $5 million.
Google's AdWords program permits Google's advertising
customers to purchase advertising links associated with
certain keywords. Google posts the links on the margins of
its search engine results pages based on whichever keywords
appear in user queries posted to Google's Internet search
engine. Google's advertising customers pay Google based on
the number of Internet users who click on these advertising
links. Click fraud (or Click
Spamming) is the term, the industry uses
to describe when someone clicks on a search advertisement
with an ill intent and with no intention of doing business
with the advertiser.
Click fraud is a growing problem in the search
engine business (some analysts believe as many
as 20% of clicks are fraudulent), and involves competitors
clicking repetitively on ads, hiring others to
do so, or using automated programs (robots) for
this purpose, in order to keep companies from
effectively using competitive keywords.
In the complaint, Google, which derives 99% of its revenue
from Adwords, is accused of breach of contract, neglicence,
unjust enrichment and unfair business practices:
Google breached its contract with Plaintiffs by collecting fees for clicks
even though Google knew, or should have reasonably known, that the clicks
were not actual clicks, but rather purposeful clicks made for an improper
purpose
Google has breached its duty to monitor its AdWords program for click fraud
and to protect plaintiffs from click fraud
Google's conduct violates the California Business & Professions Code § 17200
("unfair competition shall mean and include any unlawful, unfair or
fraudulent business act or practice.")
June 30, 2005:
Neue Klage gegen Google, intern.de:
"Google wird in einem weiteren Verfahren mit dem Vorwurf
konfrontiert, zu wenig gegen Klickbetrug zu
unternehmen."
June 30, 2005:
Click fraud lawsuit targets Google, CNet:
"A seller of online marketing tools said Wednesday it
sued Google, charging that the Web search giant has
failed to protect users of its advertising program from
click fraud, costing them at least $5 million."
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