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

Fraud and Cheating

Posted by Steve_S at April 10, 2005 11:31 AM