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Google settles click fraud case for $90m

US court approves payout

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Google's $90m payout over click fraud has been approved by a US court. Some opponents had claimed that the figure was not high enough to cover losses, but an Arkansas judge has thrown the objection out.

Google will have to pay claimants $4.50 for every $1,000 of advertising they booked with the company. Judge Joe Griffin of Miller County Circuit Court described the settlement as "fair, reasonable and adequate".

Not every company has agreed to the terms of the settlement, but Google told the Associated Press newswire that 19 of its 20 biggest advertisers involved in the case had agreed.

The case began in January 2005 when Lane's Gifts and Collectables took Google to task over its advertising system. It turned into a class action suit and 70 companies joined the case.

Click fraud occurs when an automated programme clicks on a company's adverts, making it look as though a person has clicked from Google to an advertiser's page. Because the advertiser pays for each individual drawn by its ad on Google pages, click fraud can cost advertisers significant sums of money.

The fraud most often takes place when a firm's competitors set up systems to click on its ads to run down its advertising budget. It can even happen if a website publisher clicks on the ad to boost its own revenue.

Google's opponents in the suit claimed compensation because they said Google did not do enough to prevent click fraud taking place.

Google's decision to settle was not unique: Yahoo! settled a similar case in California earlier this year.

The settlement involves credits for more Google advertising for the claimants, who had lobbied for any settlement to be paid in cash.

Google this week announced revisions to its systems that it hopes will make click fraud less common. It says its system allows users to see how many of the clicks through to its site Google believes to be fake. Some industry estimates are reported to put the proportion of clicks that are fake as high as 15 per cent.

Copyright © 2006, OUT-LAW.com

OUT-LAW.COM is part of international law firm Pinsent Masons.

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