Microsoft Tracks Down and Sues Click-Fraud Artists

Posted 06/20/2009 at 1:41am | by Justin Kerr

3

Comments

Print

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?