Korea orders Google to rewrite 'unfair' AdSense contracts

Click-fraud spat prompts action

By John Oates • Get more from this author

Posted in Financial News, 28th February 2007 13:48 GMT

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The Korean Fair Trade Commission (KFTC) has told Google to rewrite sections of its AdSense contracts which empower Google to unilaterally cancel any deal, and are considered unfair under Korean law.

AdSense displays adverts on a website and the owner of the website gets a share of the money made by Google. Because payments are based on the number of clicks each advert gets, the scheme is susceptible to click fraud, or allegations of fraud.

Humor University used the AdSense scheme, but from October to November did not get paid. When it complained to Google's US headquarters it was told its contract had been terminated because of suspicious activities.

The university then made a complaint to the KFTC. The commission upheld the complaint and has given Google 60 days to rewrite its contracts.

The decision is likely to spark a claim against Google for 20m Won (£10,800)

Humor University presideny Lee Jung-min told the Korea Times: "Google didn't pay AdSense commissions amounting to 20 million won (£10,800) to us in late 2005 while alleging we had committed click frauds.

"The FTC decision shows that Google was wrong. Subsequently, we will file a 20 million won damages suit against Google's Korean unit next week."

Lee said the company's losses were bigger than this, but it was a matter of self-esteem.