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Google Agrees to Pay Advertisers Over Click Fraud

Google Agrees to Pay Advertisers Over Click Fraud
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Mar 9, 2006 10:30 AM PST    Text size: 
MOUNTAIN VIEW, Calif. — Google will pay up to $90 million to settle a lawsuit alleging it overcharged thousands of advertisers who paid for bogus sales referrals generated through click fraud.

Any website, adult or mainstream, showing fraudulent clicks dating back to 2002 will be eligible for credit that could be used toward future Google advertising.

While Google decided to settle with businesses, others have not. The class-action lawsuit filed by Arkansas-based Lane's Gifts and Collectibles and Caulfield Investigations targeted Yahoo, as well as Time Warner and its America Online and Netscape units.

The suit alleged that the companies had conspired with its advertising partners to conceal the magnitude of click fraud to avoid making refunds.

Through the years, Google has remained consistent with its statement that click fraud is minuscule. Court documents appear to support that. The $90 million translates into less than 1 percent of Google's $11.2 billion in revenue since 2002.

In its court filing, Lane’s Gifts said Google and other plaintiffs collected fees for pay-for-click advertising, which were not actually generated by consumers clicking on the search engine sites to get to Lane's Gifts.

Google said it will allow advertisers to apply for reimbursement for clicks they believe are invalid.

Google has posted details about the proposed settlement here.

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