Google will pay $90 million to settle a class action click fraud lawsuit. Any web site operator who was also a Google ad network partner who can show improper charges over the past four years will be eligible for damages.
Google announced the news on a part of its site devoted to trivia, such as rating soft drinks. According to a weblog post from Google counsel Nicola Wong, doing her best to be folksy, “we’re very near a resolution in that case, so we thought we’d offer an update.”
The case was brought by Lane’s Gifts and Collectibles, an Arkansas merchant, and also names Yahoo! In December 2004, Google’s CFO George Reyes called click fraud “the biggest threat to our business model.”
The judge has yet to approve the deal. Avoiding a court trial will save Google some blushes. The Wall Street Journal notes that “spare it from having to disclose further details of its ad system and antifraud measures in court.
And the terms of the deal are likely to raise eyebrows, too.
Although the hole left in companies’ advertising budgets by click fraud – typically initiated by competitors – is very real, the settlement doesn’t offer any cash.
Taking a leaf out of Microsoft’s book, Google is offering rebates on future use of the Google ad network.
Microsoft was criticized for using its punishment in antitrust lawsuits brought by individual US states to advance sales of its products in those state’s public departments and schools. Like Google, Microsoft offered discounts on its software, rather than cash, which a Judge described as “court-approved predatory pricing.”
A number of other private click fraud suits against Google remain outstanding, Google’s blogging counsel failed to point out in her blog post.
A reader coined the neologism ‘Seattlement’ to refer to the process. It subsequently caught on.