TELECOM Digest OnLine - Sorted: Google Ad Fraud Plaintiff Seeks to Cut Role in Case

Google Ad Fraud Plaintiff Seeks to Cut Role in Case

Eric Auchard (
Fri, 9 Dec 2005 12:26:03 -0600

By Eric Auchard

Click Defense Inc., which had filed a lawsuit against Google
Inc. claiming the Web search leader's advertising sales practices were
fraudulent, said on Thursday it was seeking to withdraw as lead
plaintiff in the suit in order to focus on its own business.

The company said in a statement it wanted to withdraw as the lead
plaintiff named in a lawsuit seeking class-action status it had filed
against Google in June in the U.S. District Court for the Northern
District of California.

Still, Click Defense said it planned to press its claims against

"We are only withdrawing as a representative plaintiff," Click Defense
Chief Executive Scott Boyenger said in a statement, adding that the
company was doing so in order to focus on its business as a provider
of technology used to detect "click fraud" in online advertising

Virtually all of Google's revenues derive from so-called pay-per-click
advertising in which advertisers pay only for ads on which Web users
have clicked to view more information.

Click fraud is not "fraud" as defined under the law. Rather, it is an
industry term used to describe the deliberate clicking on Web search
ads by users with no plans to do business with the advertiser. Rival
companies might employ people or machines to do this because the
advertiser has to pay the Web search provider for each click.

Click fraud can run up thousands of dollars in advertiser costs or
benefit a Web site operator that gets a cut of advertising revenue
from Internet search providers.

Google declined to comment on the pending case. At the time the
lawsuit was originally filed it stated: "We believe the suit is
without merit and we will defend ourselves against it vigorously."

In general, Google says its credits advertisers who can show they have
fallen pray to "invalid click" schemes.

The complaint filed by Click Defense of Fort Collins, Colorado,
alleged that Google has refused to take steps to thwart fraudulent
advertising billing practices "even though the company was well aware
of the practice."

"We remain a member of the class and our click fraud claims against
Google will still be litigated when and if the class is certified,"
Boyenger said.

Click Defense said it was withdrawing after another potential
plaintiff had stepped forward to act as representative plaintiff.

On Wednesday, Advanced Internet Technology (AIT), a $34 million-a-year
Internet service provider serving customers in the Middle Atlantic
states and the Carolinas, said it planned to take over as lead
plaintiff in the suit against Google.

"(Click Defense) started down the road and got cold feet and we are
jumping in their stead," Jay O'Dell, a sales executive with AIT, told
Reuters by phone.

Darren Kaplan, an attorney with the law firm Chitwood Harley Harnes
LLP, remains plaintiff's counsel.

A hearing on the motion for class certification in the Google click
fraud case has been scheduled for May of 2006, Click Defense said.

Copyright 2005 Reuters Limited.

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