Fayetteville, North Carolina – (The Hosting News) – December 9, 2005 – Web hosting company and ICANN accredited domain registrar, AIT, has moved the United States District Court for the Northern District of California to substitute in as the representative plaintiff in a lawsuit against Google, Inc. that accuses the search engine engine of breach of contract and unfair business practices.
AIT’s claims center on the issue of click fraud and Google’s refusal to take steps against it even though the company is well aware of the practice. AIT claims that it has advertised with Google for years. The law firms of Kabateck Brown Kellner LLP, Chitwood Harley Harnes LLP and Law Offices of Shawn Khorrami are representing AIT in the action.
Last December, Google’s Chief Financial Officer told an investors’ conference about the threat posed by click fraud. The lawsuit, which seeks class action status, questions the seriousness of Google’s efforts to combat the click fraud threat.
Clarence Briggs, AIT’s Chief Executive Officer had this to say, ”Google is able to block spamming efforts from its own Google Gmail service and should do the same to protect its pay-per-click advertising clients. However, Google chooses to do nothing because substantive action would both invalidate the current paid search model and because a lot of people are making a lot of money from this. We have been watching this and documenting it for some time, not only for ourselves but for our customers from our network and several other networks and we have the technical expertise to prove without a doubt that it is happening and that Google could do something about it if they wanted to.”
AIT claims that it has lost hundreds of thousands of dollars to fraudulent clicks even though Google has the capability to detect fraud.
Mr. Briggs added, ”This is a business model that pays lip service to concern about fraud but, in fact, stands to lose money if the fraud is vigorously pursued. Google’s technology tracks clicks for the purpose of charging fees; that same technology could be used as a fraud screen. You get a phone bill with the numbers for which you were charged, but Google does not and will not provide you with records showing you the clicks for which you were charged or where they originated.”
AIT claims that Google has demonstrated some ability to track clicks based on having made restitution to some companies for fraudulent clicks, yet restitution appears to be exceedingly rare and Google refused to make restitution to AIT even after AIT provided Google with well-documented evidence of click fraud.
With the Ad Sense program, particularly, Google should be able to detect fraud since it controls the entire network, from taking in money to paying out commissions. ”Many of the fraudulent clicks come from overseas proxy servers; these RBL servers are widely known as origins of fraud and spam and Google should block them like any other responsible ISP does,” said Briggs.
Nearly all of Google’s revenue comes from PPC advertising; a thorough cleansing of fraud would have a huge impact on that revenue and would erode confidence in the entire PPC system. Because multiple fraudulent clicks increase Google’s revenue, Google has an apparent conflict of interest when it purports to police click fraud. Indeed, because such a large percentage of clicks on PPC advertising may be fraudulent, a vigorous anti-click fraud program might threaten Google’s entire business model.
It was activity that originated from overseas that really grabbed AIT’s attention.
Mr. Briggs continued, ”Our campaign was for North America only; so, how can someone tell me that clicks from Russia, China, and Vietnam are legitimate? When multiple clicks from the same IP block hit our site in rapid succession but none of those visitors stay, how is that legitimate? And, how serious can you expect Google to be about policing fraud since PPC advertising accounts for nearly all of the company’s revenue?”
“The real threat here is to the concept of paid search and ultimately to the entire Internet,” said Briggs. “If people lose confidence in the commercial viability of the Internet it threatens the very idea of an emerging global, digital economy. Sooner or later, if something isn’t done, the second Internet bubble will burst.”
To learn more about AIT, please visit: www.ait.com.
For further information on Google, please visit: www.google.com.