Microsoft declares war on 'sophisticated' click-fraud scheme
Legal offensive on click laundering
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Microsoft has mounted a legal offensive against scams targeting its pay-per-click advertising services, filing two lawsuits that take aim at what it says is a sophisticated new form of the crime.
In two complaints filed this week, Microsoft accused web publishers of engaging in a practice it calls "click laundering," It involves traditional forms of click fraud, in which automated scripts or hired individuals generate large numbers of clicks on website ads. But in a twist, the technique conceals the scheme by forcing the clicks to take place on parked domains and then altering referrers to give the appearance the clicks happened on the publishers' website.
The lawsuits were filed against science news and shopping site RedOrbit.com and more than a dozen unknown "John Does." Many of them are accused of falsely crediting ads to HelloMetro.com, although the network of online city guides isn't named as a defendant.
"By fraudulently generating a high volume of invalid clicks and by channeling them into Microsoft's ad network, the defendants sought to illegally profit at the expense of advertisers," one of the complaints alleges. "Microsoft expended substantial money and resources to investigate and remedy the effects of the defendants' conduct, refunding advertisers for all invalid clicks generated on RedOrbit's website during the time period at issue."
RedOrbit President Eric Ralls told multiple news outlets the allegations were baseless and that his website doesn't engage, assist in, or condone click fraud.
The lawsuits are the latest to take aim at click fraud, which usually is carried out by millions of malware-infected computers that are programmed to click on selected ads. The fraud can be perpetrated at the direction of web publishers who stand to profit each time an ad on one of their sites is viewed. Unscrupulous business operators have also been known to carry out click fraud to drive up competitors' advertising costs.
About 17 percent of ad clicks were fraudulent in the first quarter of this year, according to Click Forensics, which collects data about the practice. That's up from about 14 percent in the same three quarters of 2009.
According to Microsoft, RedOrbit reported about 75 clicks per day on adCenter ads in late 2008. But as a result of the scheme, the number of clicked ads skyrocketed to more than 10,000 per day in January and February of 2009, the complaint alleged.
Had the click-laundering scheme gone undetected, it could have defrauded advertisers of hundreds of thousands of dollars, Microsoft said in a press release. ®
COMMENTS
redOrbit statement
“RedOrbit does not, nor has it ever, engaged, assisted in, or condoned click fraud. We are disappointed that Microsoft has made these completely baseless allegations, and intend to defend against them vigorously.
“RedOrbit was selected by Microsoft to help them test their BETA advertising platform, known as pubCenter, and we participated for approximately five months beginning in September 2008. An anomalous click spike occurred over a brief period of time in January 2009, and we immediately worked with Microsoft to identify the reasons for the occurrence, including providing them with complete access to our logs. At the time, Microsoft did not conclude that there was any suspicious activity on the part of RedOrbit and we discontinued working with them.”
“RedOrbit did not participate in the scheme Microsoft alleged and was never paid for the clicks in question. We do not understand why Microsoft has chosen to launch this unsubstantiated lawsuit and public relations campaign against RedOrbit a year and a half after it failed to conclude that we had anything to do with the events in question. We look forward to refuting these claims in court.”
Why should I care?
This whole funding model invites fraud. They only just noticed.
Odd how they are keen to take action when it hurts their pockets, but have left every product for the last 30 years open to hijacking my computer,
Someone stiffed M$? Shame.
Where is the yawn icon?
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