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Click fraud – a growing trend

Publish date: 20 April 2005
Issue Number: 1077
Diary: Legalbrief eLaw
Category: Cybercrime

Google, Yahoo and other providers of online advertising are increasingly being targeted by online fraudsters who exploit weaknesses in the Internet ad system to generate revenue or hurt competitors.

While the Internet giants claim to be addressing the problem, some advertisers say that they are not working aggressively enough as they also profit from the scams. One public step that Google has taken is the filing of a suit against Auctions Expert, alleging that the company, which had signed up to host Google ads on its site, began clicking on these ads to inflate advertising revenue. The suit alleges that Auctions Expert recruited as many as 50 people to click on online advertising, generating around $50 000 in ad revenue. But advertisers, disgruntled over inflated adspend form click fraud, are also fighting back. In a suit that seeks class action status, an advertiser is suing Google for charging it for false clicks. The Washington Post report notes that one method of reducing click fraud is to change the business model from a ‘per-per-click’ to a ‘cost-per-action’ basis. Under this system advertisers would pay only for those clicks that actually generate a sale. Full report in The Washington Post

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