Microsoft files click fraud lawsuit

 

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By Matthew Sparkes

Posted on 16 Jun 2009 at 12:13

Microsoft is asking for $750,000 in damages in its first ever click fraud lawsuit.

The company claims that over several months it saw Eric Lam, Gordon Lam and Melanie Suen, of Canada, run a "massive" click fraud operation.

It is alleged that the three have links to a World of Warcraft on-line store and to car insurance advertising. The complaint, filed in Washington this week, alleges that the scam involved simulating clicks from hundreds of thousands of IP addresses to competing operations - running up huge advertising costs, with no sales to pay for them.

Microsoft claims that it was forced to hand out $1.5 million in advertising credits to compensate those affected.

The official charges include breach of fair dealing, fraudulent concealment and civil conspiracy, and alleges that the defendants committed a "massive" click fraud.

"By engaging in a widespread scheme that generated invalid clicks on links to online ads that were displayed in response to search requests on Microsoft's network, defendants disrupted the advertising campaigns of their competitors, obtained increased user traffic for their own ads at a much lower cost than they could have otherwise, and caused substantial damages to Microsoft," explains the official complaint.

As well as the three named defendents, Microsoft has included 50 unknown "John Does", who it also believes to have been involved in the click fraud operation.

Advertising giant Google has been battling click fraud in the courts since 2006, but this is the first time that Microsoft has filed a legal complaint.

According to an estimate from analysis firm ClickForensics, one in seven clicks on an advert is fraudulent.