TEXARKANA, Ark. – A set of plaintiffs in a class-action suit argued Monday that Google has not exercised reasonable care to prevent “click fraud” and has misrepresented efforts to stop swindlers from repeatedly clicking Web site links to drive up advertising costs.
The arguments came as an Arkansas judge considers whether to accept a $90 million settlement offer from Google Inc. A Texarkana company – Lane’s Gifts and Collectibles – filed the lawsuit, which Miller County Circuit Judge Joe Griffin certified as a class action.
Plaintiffs say Google has not done enough to stop click fraud, which drives up advertisers’ bills by falsely indicating the number of Web users who have “clicked” on an Internet ad to seek more information about a product.
Clicking on the ads, typically displayed at the top and sides of Web pages, triggers sales commissions even if the activity doesn’t lead to a sale. Click fraud cropped up several years ago as a way to drain advertising budgets or funnel illicit revenue to Web sites that belong to Google’s network.
“Google has a duty, in our view, to exercise reasonable efforts to filter invalid clicks,” said Attorney Steve Malouf, who represents many of the plaintiffs.
The settlement calls for $30 million in attorney’s fees with the remaining $60 million distributed as Google advertising credits. No advertiser will receive cash.
Fifty-one plaintiffs have raised objections, mostly smaller advertisers who say the deal unfairly shifts to them the burden of proving their losses and that they don’t have the resources to easily pursue their claims.
“I am a small Google advertiser and a believer that I have been forced by Google to pay for bogus clicks to my site I manage for my consulting clients. The proposed settlement fails to address our damages and the damages of those in my situation,” Galen Workman of Ozdachs Consulting in San Francisco wrote to the court.
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