(NSI News Source Info) NEW YORK - June 17, 2009: Microsoft said Tuesday that it filed suit against three Canadians and two associated businesses that the software gi
ant had committed a version of "click fraud".
Microsoft sued Eric Lam, Melanie Suen, and Gordon Lam of Vancouver, British Columbia for breach of contract, torturous interference with business relationships, fraudulent inducement and misrepresentation, computer fraud, conspiracy, and two violations of Washington anti-spyware and consumer laws. Companies named UMGE, Super Continental USA and Super Continental US, both allegedly tied to the trio, were also named, as were 50 "John Doe" plaintiffs. The complaint accuses the Lams and Suen of abusing Microsoft's adCenter network, specifically exploiting it to benefit their own company, and its ad purchases of keywords associated with so-called "gold farming" in the online game "World of Warcraft," and a separate business reselling car insurance.
The method, according to Microsoft, was a technique known as "pay-per-click fraud".
Advertisers pay a certain amount per keyword or set of keywords to promote their own company when a certain keyword search term is entered, such as "auto insurance". That money is paid out of a budget when a user clicks on the sponsored ad, and is redirected to the site. Once the budget vanished, so would the sponsored ad.
Higher bids receive higher placement, according to the complaint. But the ad is only valuable when a genuine customer visits the sponsoring site. In Microsoft's case, the defendants allegedly either manually clicked competitor's sites, or used automated tools to do so.
The effect, according to Microsoft, was to defraud those who had paid for the higher rankings, as the rival ad budgets were quickly exhausted by the artificial clicks. "This would cause the higher-sponsored sites to drop off the results page or decrease in the rankings, and the perpetrator's lower-ranking sponsored site to rise to a higher position in the sponsored site list," Microsoft's complaint said. "This improved sponsored site positioning would lead to higher and better quality traffic (and presumably greater revenue) for the click fraud perpetrator -- without the perpetrator paying a higher price for keywords."
Microsoft said it would continue to take action against other incidences of click fraud.
"Consumers and businesses around the world rely on free Internet services and content funded and powered by advertising," Tim Cranton, the associate general counsel of Microsoft, wrote in a blog post. Indeed, just last week the Interactive Advertising Bureau released a study that found interactive advertising is responsible for $300 billion of economic activity annually and has created 3.1 million U.S. jobs.
"Given the sector's size and strategic importance, it is critically important for the industry to continue working together to help combat fraud against online advertisers and promote a healthy marketplace for online advertising and Internet services to thrive," Cranton added. "This marketplace will help fuel technology advancements worldwide and provide a key element in economic recovery and growth in the years ahead."
ant had committed a version of "click fraud".
Microsoft sued Eric Lam, Melanie Suen, and Gordon Lam of Vancouver, British Columbia for breach of contract, torturous interference with business relationships, fraudulent inducement and misrepresentation, computer fraud, conspiracy, and two violations of Washington anti-spyware and consumer laws. Companies named UMGE, Super Continental USA and Super Continental US, both allegedly tied to the trio, were also named, as were 50 "John Doe" plaintiffs. The complaint accuses the Lams and Suen of abusing Microsoft's adCenter network, specifically exploiting it to benefit their own company, and its ad purchases of keywords associated with so-called "gold farming" in the online game "World of Warcraft," and a separate business reselling car insurance.
The method, according to Microsoft, was a technique known as "pay-per-click fraud".
Advertisers pay a certain amount per keyword or set of keywords to promote their own company when a certain keyword search term is entered, such as "auto insurance". That money is paid out of a budget when a user clicks on the sponsored ad, and is redirected to the site. Once the budget vanished, so would the sponsored ad.
Higher bids receive higher placement, according to the complaint. But the ad is only valuable when a genuine customer visits the sponsoring site. In Microsoft's case, the defendants allegedly either manually clicked competitor's sites, or used automated tools to do so.
The effect, according to Microsoft, was to defraud those who had paid for the higher rankings, as the rival ad budgets were quickly exhausted by the artificial clicks. "This would cause the higher-sponsored sites to drop off the results page or decrease in the rankings, and the perpetrator's lower-ranking sponsored site to rise to a higher position in the sponsored site list," Microsoft's complaint said. "This improved sponsored site positioning would lead to higher and better quality traffic (and presumably greater revenue) for the click fraud perpetrator -- without the perpetrator paying a higher price for keywords."
Microsoft said it would continue to take action against other incidences of click fraud.
"Consumers and businesses around the world rely on free Internet services and content funded and powered by advertising," Tim Cranton, the associate general counsel of Microsoft, wrote in a blog post. Indeed, just last week the Interactive Advertising Bureau released a study that found interactive advertising is responsible for $300 billion of economic activity annually and has created 3.1 million U.S. jobs.
"Given the sector's size and strategic importance, it is critically important for the industry to continue working together to help combat fraud against online advertisers and promote a healthy marketplace for online advertising and Internet services to thrive," Cranton added. "This marketplace will help fuel technology advancements worldwide and provide a key element in economic recovery and growth in the years ahead."
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