Yahoo Settles Click Fraud Case

Michael Hayes
LOS ANGELES — Yahoo escaped the fate of its rival Google, settling its class-action click fraud case for $5 million in legal fees and promising to institute a variety of anti-click fraud measures.

U.S. District Court Judge Christina Snyder gave preliminary approval for the settlement, which requires Yahoo to pay a small cash sum, extend its period for advertisers to file complaints and take steps to limit click fraud in the future.

Click fraud is the practice of charging pay-per-click advertisers for fraudulent clicks. Investigative firm Checkmate Strategic Group brought the case in June 2005, alleging click fraud dating back to early 2004.

In addition to paying the plaintiff’s legal fees, Yahoo will offer advertisers a one-time extended claims period to submit click fraud claims that occurred after January 2004.

As part of the settlement, the company also will establish a Traffic Quality Advocate office to address advertiser concerns about click fraud and traffic-quality issues. Yahoo will further combat the industrywide problem of click fraud by working to develop a definition of the problem and creating a comprehensive list of identified bots.

While not required to do so in the settlement, Yahoo has pledged to provide advertisers with more clarity regarding refunds for instances of click fraud.

Yahoo’s relatively paltry cash settlement pales in comparison to a recent settlement in a case brought against search engine giant Google. The Mountain View, Calif.-based company agreed to pay $90 million to settle that case.