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Judge OKs Google's Click-Fraud Settlement

July 28, 2006|From the Associated Press

TEXARKANA, Ark. — An Arkansas judge approved a $90-million settlement Thursday between Google Inc. and its advertisers that claimed the leading Internet search company improperly billed them for fraudulent clicks on their ads.

Miller County Circuit Judge Joe Griffin called the settlement "fair, reasonable and adequate" and downplayed claims that it hurt small advertisers. More than 70 objections were filed, with smaller companies saying they didn't have the resources to prove click-fraud losses.

By settling claims made in the plaintiffs' class-action lawsuit, Google will give advertising credits that are the equivalent of a $4.50 refund on every $1,000 spent in its advertising network during the last 4 1/4 years.

No one will receive cash except the lawyers, who will split $30 million.

In Internet advertising, clicking on ads triggers sales commissions even if the activity doesn't lead to a sale. Click fraud cropped up several years ago as a way for scam artists and rivals to drain ad budgets or funnel illicit revenue to websites.

Some of the plaintiffs in the Arkansas case went before Griffin on Monday to argue that Google hadn't taken reasonable care to prevent click fraud and overstated the steps it has taken against would-be swindlers.

A Texarkana company, Lane's Gifts & Collectibles, filed the lawsuit. Google did not admit liability in the case, which also involves other Internet companies, whose cases continue.

Daralyn Durie, an attorney representing Google, said the majority of class members had agreed to the settlement, including 19 of the company's 20 largest advertisers.

An independent report filed last week said that although Google appeared to be doing reasonably well protecting advertisers from scam artists, it remained unclear how much the system was being bilked by click fraud.

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