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Law Professor Calls Click Fraud Lawsuits Shakesdowns

Law Professor Calls Click Fraud Lawsuits Shakesdowns
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May 12, 2006 3:40 PM PDT    Text size: 
MILWAUKE, Wis. — The recent spike in click fraud lawsuits against Internet service providers such as Yahoo and Google have some in the legal community fighting back, among them a law professor who called such suits “shakedowns” on his blog.

Marquette University Law School Professor Eric Goldman likened plaintiffs’ lawyers who filed a recent class-action lawsuit against Yahoo to extortionists.

Concluding that it is often cheaper for defendants like Yahoo to settle rather than litigate, Goldman urged the company to fight.

“I think these lawsuits are nothing more than a shakedown for cash,” Goldman wrote. “Even unmeritorious class action lawsuits are expensive to defend, so the plaintiffs’ lawyers can exploit those defense costs for their personal largesse. They can make this argument to defendants: Settle with me for a fraction of your total expected defense costs, and we’re both better off (defendants save some defense costs, plaintiffs’ lawyers grab some personal loot).”

For their part, lawyers for the plaintiffs in the Yahoo case were not pleased by Goldman’s allegations.

“[Goldman] read a piece of paper that was filed in court and he's making an accusation of criminal activity, which I just think is irresponsible,” Thomas More Marrone, one of the plaintiffs’ lawyers, said.

Another plaintiffs’ lawyer in the case, Ben Edelman, who Network World described as “the most respected independent adware expert,” said that commenting on Goldman’s defamatory speech “unduly dignifies” the comments. Edelman added that he believed the suit “speaks for itself.”

In the present suit, Yahoo is accused of promising advertisers who paid higher fees that their ads would appear on “premium” sites like CNN, but according to court papers, the ads actually appeared via spyware and adware, and often on “less-than-premium” sites, damaging the reputation of the ad buyer and diminishing the punch of the ads.

In a similar case, which Google tried to settle for $90 million, plaintiffs’ attorney Joseph Kinney filed papers to block the settlement, charging that the amount agreed upon by some plaintiffs does little to hold the company accountable to advertisers and the public.

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