Yahoo! Settles Click Fraud Lawsuit

Yahoo!'s proposed settlement for click fraud case with Checkmate Strategic Group has been accepted in a California court.  Yahoo! has to pay $4.95 million to plaintiffs' counsel in cash as part of the setllement. There is also a provision which allows advertisers to file a claim for investigation of potentially fraudulent clicks back through January 2004. If the claim holds and fraudulent clicks has veen billed, then Yahoo! will refund advertisers.

Reggie Davis, associate general counsel for Yahoo! called this "a reasonable and fair settlement."

Last year Google agreed to a $90 milllion settlement in Lane's Gifts click fraud case. While the amout Google paid is much bigger and is paid in credit, Yahoo! is paying in cash. Yahoo! took a strong position defending its proprietary system that gurads against click fraud. The plaintiffs' attorneys and their experts were invited to meet Yahoo's clickthrough protection team and examine its systems. In their press release, Yahoo! maintained,

For the past eight years, our Clickthrough Protection (CTP) system has run 24 hours a day, seven days a week, using search and click data to identify suspicious clicks and remove them from our billing system. During that period, our system has identified and not billed advertisers for billions of clicks. This includes click fraud as well as other clicks that we believe shouldn't be billed to advertisers (for example, blocked IP addresses, double-clicks, back browser clicks).

As part of the settlement, Yahoo! has agreed to the following terms-

• One-Time Extended Claims Period: Yahoo! will offer advertisers a one-time extended claims period during which advertisers can submit click fraud claims for clicks dating back through January 2004. If our investigation determines that a credit is due that was not given previously, we will issue a 100% credit, which can be used however the advertiser wishes to use it. This claims process will be overseen by a retired Federal judge.
• Dedicated Traffic Quality Advocate: Yahoo! will appoint a Traffic Quality Advocate who will be dedicated entirely to addressing advertiser concerns about click fraud and traffic quality issues. This advocate will serve as the internal voice of the advertiser within Yahoo! on these matters.
• Annual Access to CTP System and Team: To ensure that the advertising community has ongoing visibility into our Clickthrough Protection system, Yahoo! will host a panel of individual advertisers at our CTP headquarters once a year. During these visits, we will allow the advertisers to review our systems, meet with the CTP team and provide feedback on how we can continue to enhance our approach to fighting click fraud.
• Industry-Wide Click Protection Efforts: Yahoo will work with a reputable third party toward building industry-wide efforts to combat click fraud, including development of industry-wide definitions of click fraud and a comprehensive lists of identified bots.
• Traffic Quality Resource Center: Yahoo! will commit technical and human resources to build a Traffic Quality Resource Center, which will provide advertisers with more detailed information about traffic quality issues (including click fraud) and solutions via FAQs, advice columns, best practices guides and additional access to analytics tools.

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