Advertiser Sues To Block Google Settlement

    May 11, 2006
    WebProNews Staff

One can imagine Joseph Kinney’s thoughts, when he learned that the only cash handed out from Google’s click fraud settlement was going to attorneys, and that in order to claim his compensation (paid in advertising credit), he would have to re-launch the Google ad campaign he had already abandoned.

This must have been why Kinney filed a class action suit this week in an Arkansas court to block the proposed $90 million settlement up for approval by a judge in July. After $30 million in attorneys’ fees, the thousands of advertisers that accepted the terms would be required to divvy up the remaining $60 million in credit.

According to the Associated Press, Google has dismissed the filing to block the settlement as an “inappropriate” circumvention of the legal process and a “quest for attorneys’ fees.”

A spokesman for Google says, under the terms of the settlement, Google would honor 0.5 percent of the total spend (not of the estimated click fraud) claimed by advertisers, who would not have to prove the level of click fraud, or about $5 for every $1,000 spent at Google since 2001.

That’s bad news for John Thys, director of Internet marketing at, who believes Google owes him 35 percent of the $20,000 he’s spent with them – he’ll receive $100 in credit for what he believes to be $7,000 in fraudulent clicks. Google said its filters had identified fraudulent activities and had never billed him for the clicks. Thys says Google never provided data to back up its claims.

“It’s almost like an insult that they expect us to take this token money,” said Thys.

That lack of data provided is one of the loudest complaints coming from advertisers, many of whom believe Google has a vested interested in not refunding the total amount of click fraud cash. According to high-end estimates, which put the click fraud rate to around 30 percent, Google could be liable for up to $5 billion. Google says the lack of data is important so that its click fraud detection methods are not revealed, making it easier to defraud advertisers.

Google also believes that advertisers’ estimates are inflated.

“We believe losses to click fraud are small. It is unclear how exaggerated estimates of click fraud are put together, but it’s very likely that they include attempted fraud already caught and discarded by our automatic filters,” Google’s Barry Schnitt told WebProNews. “We’re working on ways to provide more information to advertisers.”

Web hosting company AIT’s CEO Clarence Briggs believes the click fraud issue is headed for US Senate Judiciary Committee hearings.

“I’ve gone to Capitol Hill and spoken with members of the US Senate and representatives for the Judiciary Committee. We have been contacted and asked for additional information on this issue; they have told us that hearings are likely and I expect to go testify,” said Briggs.

Briggs visited with Richard Burr of North Carolina, said a spokesperson for AIT, and has had contact with Arlen Specter’s office.

Many have speculated that the click fraud issue is Google’s Achilles heel in the Internet space and that the search engine that is able to provide advertisers with clear click fraud data while becoming the most effective at combating it is the one that will win out in search marketing.


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