Online advertising is an increasingly popular marketing option. Businesses are looking for new and innovative ways to use the Internet for their marketing needs. One such marketing technique includes pay-per-click advertising. Are you looking to take your business to the next level with online marketing? Are you using pay-per-click advertising to reach new customers? If so, you may be a victim of pay-per-click fraud. For a case evaluation, contact our law firm to speak with an experienced attorney who can explain this area of law and the available legal options.
Pay-per-click advertising is a form of online marketing where a user clicks on advertisements on web pages that include links to transport the user to the business's website. The business then pays the website or search engine a fee according to the number of consumers who click on the advertisement and visit the website. Pay-per-click fraud occurs when a person, automated script, or computer program imitates a legitimate user of a web browser clicking on an advertisement, for the purpose of generating a charge per click without having actual interest in the link's target. Individuals or businesses may engage in pay-per-click fraud to increase costs for competitors and deplete their advertising budget. Pay-per-click fraud is costing online advertisers about $800 million, with an additional $500 million, that online advertisers are no longer spending on pay-per-click.
Pay-per-click fees are a primary source of revenue for search engines such as Google and Yahoo. These search engines may even further fraud by allowing illegitimate clicks on advertisements on their respective websites. Further, search engines have refused to release the necessary information, for example due to alleged privacy reasons, wherein victims, claimants, and regulators have been unable to detect the nature and extent of the fraudulent transactions.
A representative from Yahoo commented that the search engine is confident in its ability to recognize fraudulent clicks and adjust billing to its online advertisers accordingly. Search engines have engaged in lengthy litigation over the issue of fraudulent clicks and the damages companies suffer towards online advertising costs. In 2006, Yahoo reached a settlement agreement with Checkmate Strategic Group requiring Yahoo to pay $5 million in legal fees and to review prior complaints of click fraud. In Lane's Gifts & Collectibles v. Yahoo! Inc., et al., co-defendant Google agreed to a $90 million settlement fund in a class-action lawsuit. The lawsuit alleged that Google, inter alia, had conspired with its advertising partners to conceal the magnitude of click fraud to avoid making refunds.
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