Microsoft Sues Alleged Click Fraudsters

    June 16, 2009
    Chris Crum

Reuters and the Wall Street Journal are both reporting that Microsoft is suing three people, accusing them of click fraud. The company apparently filed a complaint on Monday in a US federal Court in Seattle.

Microsoft claims to have lost over $750,000 as the result of the actions performed by the three. "Under the scheme, large groups of people or automated computer scripts click on online advertisements without having any interest in the services or product being advertised," Reuters explains.

The 3 defendants named are Eric Lam, Gordan Lam, and Melanie Suen. Gordan Lam told WSJ he wasn’t aware of any lawsuit, and nobody seems to have been able to reach the other two. Nick Wingfield at WSJ reports:

AdCenterMicrosoft said it’s taking the action to crack down on click fraud, in which automated computer scripts or large groups of people click on online advertisements without having any interest in the services or product being advertised. The company alleges that the defendants engaged in "competitor click fraud," one form of the ruse in which a perpetrator seeks to exhaust a competitor’s advertising budget while boosting the prospects of their own advertisements. Online advertisers pay based on how many users click on their advertisements.

Microsoft said starting last year that legitimate advertisers using its online advertising service began experiencing waves of fraudulent clicks on their advertisements, which were promoting auto insurance and virtual currency used in the online game World of Warcraft. After an investigation, Microsoft said it traced the source of the allegedly fraudulent traffic back to the defendants.

It’s interesting to see the suit come so soon after the launch of Microsoft’s new search engine Bing. Although the alleged activity took place in the Live Search days, Bing is bringing a lot of new attention to Microsoft’s adCenter. It’s probably smart of Microsoft to make it clear that click fraud won’t be tolerated if Bing is anywhere near successful as what Microsoft hopes. Of course results are also used in Facebook web searches.