• Google Still Battling Second Click-Fraud Case
  • March 30, 2006
  • Law Firm: Manatt, Phelps & Phillips, LLP - Los Angeles Office
  • A second click-fraud lawsuit filed against Google in California last June will go forward despite the proposed $90 million settlement in an Arkansas click-fraud case announced earlier this month.

    The plaintiffs' lawyers in AIT v. Google will continue to seek class-action status in their case against the giant search engine for not taking sufficient steps to prevent bogus clicks on paid search ads. Advanced Internet Technology, a Web-hosting and domain name firm, took over the lead in the case from click auditing firm Click Defense in December 2005. The case centers on Google's pay-per-click advertising services, in which advertisers pay only for ads on which Internet users have clicked for more information. The suit alleges that Google has refused to take steps to put a stop to click fraud, or the deliberate clicking on ads by competitors or other users who have no intention of doing business with the advertiser. Google says it credits advertisers who can show they have been victimized by click fraud.

    As reported in the March 14, 2006, issue of [email protected], Google proposed to settle a class-action lawsuit filed in Arkansas state court by Lane's Gifts and Collectibles for $90 million. The settlement must be approved by the judge overseeing that case and the class.

    As reported in the December 19, 2005, issue of [email protected], the AIT suit, filed in June 2005, is scheduled for a hearing on class certification before a federal court in the Northern District of California on May 13. According to the plaintiffs' attorneys in that case, if they win class certification, the proposed settlement in Arkansas will not apply to their clients.

    Some details of the proposed settlement have been kept under wraps pending the decision of the Arkansas court, and attorneys in the AIT case pointed out that they are basing their decision to proceed on incomplete information. Other lawyers, including the plaintiffs' lawyers in the Arkansas case, have said that approval of the settlement might preclude any other class action suit against Google for click-fraud.

    Defendants in the Arkansas case include Yahoo!, AOL, Lycos, Ask.com, LookSmart, Miva, and Go.com. Many of those will probably be covered by a settlement in the case, since they were simply distributing ads on their Web pages that had been placed by Google. But Yahoo! and Miva would not be included in a settlement.

    Significance: It seems unlikely that Google would agree to settle one click-fraud class action for $90 million if it doesn't cover other click-fraud cases. Class actions based on similar allegations are typically consolidated in one court to prevent this kind of confusion. It will probably take some time to sort everything out.