Lane's Gifts v Google
Google Settles ClickFraud Lawsuit for $90M
Lane's Gifts and Collectibles, a gift shop in Arkansas, filed a lawsuit against a number of Internet providers including Google, Yahoo!, Netscape, and America Online, for knowingly overcharging for their "pay per click" advertising services.
Hoping that other advertisers will join as plaintiffs in a class action suit, the gift shop alleged that the defendants have conspired to create an online environment that causes advertisers to suffer damages. The gift shop claimed that the advertising traffic was often generated fraudulently by people attempting to increase the advertiser's fees, not bona fide customers looking for information. The providers do not disclose that they are routinely and systematically overcharging for pay per click advertising revenue.
Google came to an agreement with Lane's Gifts for $90 million in March 2006. Until the settlement is approved by the judge, the amount is not final.
According to Google, terms of the agreement involves allowing advertisers to apply for reimbursement for clicks they believe are invalid. Advertisers can apply for reimbursement for clicks that happen during the 60 days prior to notifying Google. Under the agreement with the plaintiffs, Google make the window available for all advertisers, regardless of when the questionable clicks occurred. For all eligible invalid clicks, Google will offer credits which can be used to purchase new advertising with Google. Under the agreement, the total amount of credits, plus attorneys fees, will not exceed $90 million.
