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Expert's Report Backs Google in Lawsuit Over Click Fraud

July 22, 2006|From Reuters

An independent report filed in an Arkansas court handed Google a victory Friday over disgruntled advertisers who had sued the search engine giant accusing it of trying to drive up fees through so-called click fraud.

The two sides had agreed to commission the report as part of a settlement deal for the lawsuit, filed by advertising customer Lane's Gifts in a state court in Miller County, Arkansas.

The suit alleged Web advertisers allowed their pay-per-click ad systems to be abused in order to drive up fees paid by customers. It argued that companies such as Google have not taken reasonable steps to regulate the practice.

"Based on my evaluation, I conclude that Google's efforts to combat click fraud are reasonable," said Alexander Tuzhilin, a professor of information systems at New York University, in the report. Lane's Gifts commissioned Tuzhilin's report.

Google, in a statement on its website, said in response: "The bottom-line conclusion of the report is that Google's efforts against click fraud are in fact reasonable." It added: "It is an independent report, so not surprisingly there are other aspects of it with which we don't fully agree."

In a separate court filing, Google urged the judge in the case, Joe Griffin, to give his final approval to the settlement that was first announced in March and given preliminary approval in April.

A hearing is scheduled to be held Monday to hear objections raised to the proposed deal, in which Google has agreed to pay as much as $90 million to settle charges of overbilling customers.

Tuzhilin, an expert in Internet marketing, said in the report that his investigations were hampered by a lack of hard data to verify the exact scope of the problem or what measures Google is taking to combat click fraud abuses of its system.

However, he said that indirect evidence he collected via discussions with Google's fraud prevention team supports the conclusion "with a moderate degree of certainty" that the company's invalid click detection problem is "under control."

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