Google is being sued for allegedly not doing enough to prevent pay-per-click fraud affecting its advertising programs.
Click Defense, a Google advertiser and a supplier of systems that monitor for click fraud, is suing Google for at least $10m (£5.4m) and is seeking to turn its claim into a class action involving other Google advertisers.
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Click Defense claims Google has not made sufficient effort to counter such fraud as it gets paid by the advertiser for every fraudulent click.
There are two common types of click fraud. Rival companies can employ individuals or set up systems to click on rivals’ ads, knowing that every click will force up competitors’ advertising costs.
Another potential problem is publishers of websites who run pay-per-click ads. The more ads that are clicked on the site, the more advertising commission a website publisher can receive.
Google has rejected Click Defense’s claim. Google, however, acknowledges that click fraud is a serious problem and already refunds advertisers money where click frauds have been detected.