Class Action Accuses Yahoo of Bilking Advertisers by Click Fraud

NEWARK, N.J. — Yahoo has been hit with a federal class-action lawsuit alleging that the search engine fraudulently bills customers for pay-per-click ads by counting clicks improperly and that it places ads on “typosquatting” sites.

Initiated by Crafts by Veronica of Newark, the complaint says that Yahoo promises to put ads in “highly targeted” websites, then enters into syndication agreements to place them on sites that are randomly selected.

The suit, filed in U.S. District Court in Newark, N.J., further says that Yahoo promises not to place its customers’ ads “in pernicious spyware programs, [but] defendants have done just that, and have charged their advertising customers for every click made on spyware popup ads.” The suit names Yahoo, as well as subsidiary Overture and John Doe “syndication partners.”

“Instead of safeguarding against such abuse, finding such practices and diligently putting a stop to them, defendants have actually engaged in such abuses,” the suit says.

Among the spyware vendors named in the suit as partners in Yahoo's ad program are Direct Revenue and Intermix, two companies recently sued by New York Attorney General Eliot Spitzer for violating consumer protection laws.

The suit includes examples of customer ads shown on typosquatting sites, such as “Expedai.com,” a “parked domain,” which includes a Yahoo ad for the real Expedia.com. Expedia would be required to pay Yahoo and the owner of that typosquatted domain a hefty fee each time someone clicks on the Expedia link on that site.

The claim further contends that plaintiffs oftentimes are forced to pay high “sponsored search” prices even when they receive less valuable “content match” advertising places.”

“Defendants pay their syndication partners to show advertisers’ ads in contexts that the advertisers never agreed to or contracted to pay for,” the suit says.

Among the spyware vendors named in the suit as partners in Yahoo's ad program are Direct Revenue and Intermix, two companies recently sued by New York Attorney General Eliot Spitzer for violating consumer protection laws.

The class-action suit includes examples of customer ads shown on typosquatting sites, such as “Expedai.com,” a “parked domain,” which includes a Yahoo ad for the real Expedia.com. Expedia would be required to pay Yahoo and the owner of that typosquatted domain a hefty fee each time someone clicks on the Expedia link on that site.

Yahoo already is challenging “click fraud” claims that it overcharged customers for advertising. One of those suits was filed in California; the other in Arkansas. The Arkansas suit also named Google, which agreed to pay up to $90 million to settle the case.

Plaintiffs attorney Lisa J. Rodriquez of Donna Siegel Moffa and Yahoo officials did not immediately respond to XBIZ by post time.

Copyright © 2024 Adnet Media. All Rights Reserved. XBIZ is a trademark of Adnet Media.
Reproduction in whole or in part in any form or medium without express written permission is prohibited.

More News

Opinion: Why Device-Based Age Verification is the Key to Protecting Minors Online

Across the United States, state legislators on both sides of the aisle have attempted to tackle the crucial goal of preventing minors from accessing adult content.

TMZ: VMG's Mike Moz in Talks About 'Potential Collab' With Yeezy

Vixen Media Group’s Mike Moz told TMZ on Friday that the company has been discussing a potential collaboration with Kanye West’s brand Yeezy.

Age Verification: FSC's Mike Stabile Reports from the Front Lines

Two years into the religiously-inspired crusade to ban free access to adult material in the U.S. through carefully drafted "age verification" legislation, the constant onslaught of state-by-state proposals and laws — many of them copied from each other — can be hard to follow.

Written Erotica Platform 'Hevvn' Launches

Hevvn, a new platform aimed at erotica writers seeking to publish, promote and profit from their work, debuted Thursday.

Sssh.com's Angie Rowntree Speaks at Brown University

Sssh.com founder Angie Rowntree spoke at a Brown University class last week, discussing several topics related to adult filmmaking.

Online Industry Veteran Joe E. Passes Away

Online industry veteran Joe E has passed away, according to friends and industry associates.

Judge Acquits Backpage Defendants of Most Charges Before 2nd Retrial

A federal judge acquitted former co-owner of Backpage.com Michael Lacey and two co-defendants on most of the counts remaining from the protracted trial launched against the website operators by the Justice Department in 2018.

Adult Time Partners With Animation Studio 3DGspot

Adult Time has signed a deal to stream content from animation studio 3DGspot.

Georgia Gov. Brian Kemp Signs Age Verification Bill Into Law

Republican Gov. Brian Kemp this week signed into law a bill that includes provisions requiring age verification for viewing adult content in Georgia, mirroring legislation being sponsored around the country by anti-porn religious conservative activists.

AEBN Publishes Popular Searches by Country for February, March

AEBN has released the popular searches from its straight and gay theaters in more than three dozen countries during February and March.

Show More