April 10, 2005
Advertisers Sue ALL the major PPC Search Engines
It was only a matter of time: The lawsuit names Yahoo! Inc., Overture Services, Time Warner Inc., America Online Inc., Netscape Communications Corp., Ask Jeeves Inc., Buena Vista Internet group, Google Inc., Lycos Inc., Looksmart Ltd. and Findwhat.com Inc. as defendants in the national class action lawsuit.
Spread the News - It's no longer a dirty little secret
Lane's Gifts and Collectibles LLC in Texarkana, Ark., filed the civil lawsuit on Feb. 4 in Circuit Court in Miller County. The suit resolves around "click fraud" and alleges: "Defendants are engaged in a conspiracy to bill and/or collect advertising revenue for services which were not actually and/or legitimately provided to plaintiffs ... Defendants conspired to conceal the fact that they were overcharging and/or over-collecting revenue for advertisements which were not actually provided to the plaintiffs from bonifide customers," according to the lawsuit.
John C. Goodson of Keil & Goodson in Texarkana, Ark., said the lawsuit will affect the entire Internet search engine industry. Many of the plaintiffs in the case are businesses, including Fortune 500 companies that advertise with these search engines. Goodson declined to name all of the companies who could potentially benefit from the lawsuit." Source
Google Fights back
They want the lawsuit dismissed and who can blame them for trying, given the adverse publicity and the real danger that an industry wide "dirty little secret" will find it's way into a class action lawsuit which could cost all the major players millions of dollars.
"In its motion to dismiss the lawsuit, Google's lawyer, Jennifer Haltom Doan of the Texarkana, Texas, firm Halton & Doan, reminds Judge Barnes that the plaintiffs-led by Lane's Gifts and Collectibles of Texarkana, Ark.-alleged a breach of their advertising contract.
But Google argues that Lane's and the other companies that advertise on the search engine agreed to their contracts before beginning their advertising campaigns. In the written legal arguments used to back up her motion, Doan argues that the advertisers were forum shopping.
No forum selection clause in any of the contracts calls for the venue in this district," according to Google's brief." Source
My view
I'm not an attorney but with every single major player in the PPC space named as defendants and the possibility that this lawsuit may obtain class action status which could produce thousand of Advertisers who join the plaintiffs cause, it's time to clean up an industry which has been tainted for many years. We have tried to document many of these abusive issues in previous articles but it's always valuable to restate the issues:
(1) All the major Search Engines still display search results for the tools which cheaters use. Including but not limited to click bots and impressions spam tools. Remove and permanently ban these sites.
(2) SUE numerous Webmasters and anyone else who engages in either click fraud or impression spam.
(3) Shut down sites and sue Webmasters who sell or give away "keyword bid lists"
(4) Stop approving sites and permanently ban them which are obviously built to "game" the system. If a site like this sneaks into your Affiliate program, terminate them and don't pay them. My grandmother could figure this out: steal some content about law suits or medical terms, create the site, and then click. Just how hard is that to figure out.
(5) Take complaints seriously and do something. You ignore a lot of cheater and gamer complaints and or do nothing about it. Your auto responder emails and or pass it up the ladder don't impress me and never solve the real problem.
(6) Don't run adverts for cheater tools and or "keyword bid lists" You still do this and it's morally and ethically reprehensible.
(7) Spend some time posting in other Forums. Yea, I know who Google Guy is BUT exactly who are you kidding. Stop lurking and start posting in other Quality Communities with an Affiliate Focus. NOT a SEO/SEM focus. Unless you have been living under a rock, you already know which Communities I'm talking about.
(8) If an Advertiser contacts you with data which supports the claim of either click fraud or impression spam, don't take 1 month to figure out what the amount of your "make good" will be. Yes, I know how the game is played and your hope is that some Advertisers will forget but that kind of mindset is one of the major reasons you currently find yourselves in court as defendants.
Our previous articles on this subject which open in a new window:
AdWords Impression Spam will cost you a bundle
Posted by Steve_S
April 08, 2005
Phishing incidents continue to increase. New identity theft techniques may destroy the Internet
The Anti-Phishing Working Group reports a 26% average monthly growth rate for the period of July through February 2005. Unfortunately, our previous predictions have come true with a few new twists and turns for your reading pleasure.
Microsoft Sues: A poor start
Microsoft recently filed 117 federal lawsuits against unnamed (John Doe) defendants. This amounts to a fishing expedition so they can use other legal procedures to force third parties to disclose data. It also underscores the challenge in catching these criminals since no specific individuals and or Companies were named.
Where are the other major Internet players? Folks like Google, Yahoo, Ebay/PayPal, AOL, Amazon, and many others need to think long term, and aggregate a legal attack using the Billions of dollars they collectively have. Has the thought ever crossed their minds that a few million dollars spent on consumer education is the other tactic which must be deployed.
Where are the 60 plus brands whose image is tarnished with these Phishing attacks? Names like Visa, MasterCard, Chase and Citi sit back and do not file legal action. While a reputable organization like The Anti-Phishing Working Group is a great start it's never going to significantly reduce this problem.
Certainly, I am aware of some Toolbar solutions, hot lists, and political efforts to pass legislation which sends these criminals to jail but these proprietary solutions are more of a publicity stunt and miss the effective solution which is a coordinated legal attack by numerous companies who are working together and combine this with a collective effort to educate consumers.
Given the short sited nature of most of the major players and lack of cooperation with each other, I'm not very optimistic and will guarantee you that the incidence of Phishing will continue to increase at alarming rates.
Phishing criminals are much smarter than their enemy
As the effectiveness of fraudulent emails has decreased, the criminals have and will continue to use new techniques to lure consumers into releasing their confidential data. Consider the increasing incidence of the following:
(1) An ecommerce site which may sell plane tickets, consumer goods, insurance, or even mortgages. The "Kits" are already circulating and in some cases a nice ranking in a Search Engine and or a PPC advertisement insures a steady flow of new victims. A few of these clever criminals will even recruit Affiliates or join some of the larger CPA networks who in general lack the necessary resources and desire to properly vent listings and or merchants.
(2) Fake software updates and patches will become more prevalent. Once installed on the surfers computer, they will log keystrokes, phone home, and capture screens. Writing a virus is no longer the fad. Why bother, when a criminal can make money writing and .exe which steals data.
(3) Fraudulent "Surveys" which promise numerous prizes but require personal data is already starting to appear. Win 10K but first I want your DOB, address, bank account info to wire you the funds, and much more. Need some traffic? Just purchase a site which already has traffic and recoup your investment the first month.
(4) Fraudulent Affiliate programs which make wild payout claims and target greedy and ethically challenged Webmasters. In some cases, it's not even necessary to start your own Affiliate program. Just join a greedy and well known network engaged in the CPA space and let them bring you victims.
The final words of wisdom
We expect Phishing/Identity Theft incidents to continue to increase at an alarming rate for the next few years. Our next article will focus on tips and tricks to spot the criminals in action and hopefully provide you with the necessary steps to avoid Identity Theft.
Data Source: Phishing Activity Trends Report - February 2005
Posted by Steve_S