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 © 2026 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

Ukrainian Legislators Revive Porn Decriminalization Push

The Verkhovna Rada, Ukraine’s parliament, is once again considering a bill that would decriminalize the creation and distribution of pornography in that country — an activity that currently carries a prison sentence of three to five years.

Ofcom Fines XGroovy $986,000 for AV Noncompliance

U.K. media regulator Ofcom on Thursday imposed a fine of 700,000 pounds (about $986,000) against adult website XGroovy for failing to comply with provisions of the Online Safety Act.

Segpay Opens New Global Headquarters in Boca Raton

Segpay has selected Boca Raton for its new global headquarters.

X3 Euro All-Stars Paint Amsterdam Red in Billboard Campaign

The X3 Expo Euro All-Stars are making a splash on the vibrant streets of Amsterdam as the creator-first fan event prepares to make its debut on the continent.

Tiny Secret Games Taps Pauline Schmiechen for Growth and Partnerships Advisor

Adult game studio Tiny Secret Games has named Pauline Schmiechen as its new growth and partnerships advisor.

BranditScan Names Aerie Saunders as Community Manager

BranditScan has named Aerie Saunders as its new community manager.

'Goddess' Charlotte Sins Blesses the September Issue of X3 Magazine

Charlotte Sins graces the cover of the September issue of X3 magazine, the premier publication capturing the real personalities, passions, and stories behind top stars.

Centrobill Names Len Garcia as Chief Sales Officer

Centrobill has named Len Garcia as its new chief sales officer.

Mistrezz.AI Joins ASACP as Corporate Sponsor

The UK-based adult AI companion platform Mistrezz.AI has signed on as the latest corporate sponsor for Association of Sites Advocating Child Protection (ASACP).

Woodhull Freedom Foundation Debunks Pornography Myths in Latest Edition of 'Fact Checked' Series

Woodhull Freedom Foundation is hosting the latest edition of its virtual series “Fact Checked by Woodhull,” addressing myths about pornography.

Show More