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Microsoft Tracks Down and Sues Click-Fraud Artists

Posted 06/20/09 at 04:41:19 AM  by Justin Kerr

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Click Fraud

One of the biggest concerns for online advertisers these days, is getting the most out of increasingly tight budgets, and protecting themselves from click-fraud can be difficult. Companies bid on search keywords, and depending on the popularity of the term, often pay top dollar to float to the top of the sponsored results list. This model is tested and true, but once they reach their spending limits, they drop off leaving the next highest bidder in their place.  Click-fraud artists can be somewhat hard to trace, they often operate through proxies, or sometimes even botnets to mask their IP’s. But after a year of intense investigation, Microsoft has finally tracked down three individuals linked to a number of small corporation names, and is taking them to court.

Microsoft is seeking about $750,000 in damages from British Columbia, Canada residents Eric Lam, Gordon Lam, and Melanie Suen. “We have decided to become more active in the commercial fraud area on the enforcement side,” said Tim Cranton, associate general counsel for Microsoft. “The theory is you can change the economics around crime or fraud by making it more expensive.”

Analysts believe that Microsoft is simply testing the waters with this lawsuit, and primarily hope that it will intimidate people away from a life of online crime. This specific case involved the three accused fraudsters of running up the tabs on keyword searches related to “auto insurance” and “World of Warcraft”. Once they had expended the budgets of their competitors, their network of sites would slowly float to the top, and pickup traffic at bargain prices.  

With little legal precedent to lean on, do you think this case will be successful?

COMMENTS:3
TAGS: microsoft, lawsuit, legal, fraud, online advertising, Crime, Bing
COMMENTS
avatar both of you are way off.

Submitted by nekollx on Sat, 06/20/2009 - 10:47am

 both of you are way off. First off its not anti competittive for MS. It's anticompetitive for the Sponsored Links, these 3 play with clicks to forces people paying a premium to have to pay way to much forcost per click while bottom feeders like them whopay the'minimum' float up.

And MS  (and Google) are not "skewing the results" sponsord links are a second table. You get your normal list based on the keyword you use and a SECOND list of sponsors who ALSO used that keyword, sorted by price per click. So you get your unbiased results which may put what your looking for on page 3, but if they ALSO are a sponsor you have that nice short list of sponsors that might have your site on page 1

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avatarPayola

Submitted by MeTo on Sat, 06/20/2009 - 10:09am

If search providers would provide real search results this would not be a problem. Taking cash to place some body higher up on the list should be illeagle. We had this problem with radio you know like hay give me $1 thousand dollars and i will play your song 50 times a day(promoting one song over the other) for back door un reported profit. If search sites need to make money they should sell advertising on there page. When i search i want unbiased results.

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avatarIf its just for getting

Submitted by chronium on Sat, 06/20/2009 - 4:59am

If its just for getting sites better search results then no I doubt Microsoft will have any luck. In all likely hood Microsoft will get sued for anti competitive practice or whatever its called for building a monopoly since that is basicly what they're trying to do. If they were targeting hackers and scammers that would be a different argument all together.

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