Microsoft goes after click-fraud clan

Robert Galbraith/Reuters
Crush the fraudsters: Microsoft CEO Steve Ballmer talks to Stanford students in May.

"You think this is a game, cat and mouse, back and forth. At some point, once we figure out who you are, we’re going to hold you accountable for it, it’s going to be expensive..."

That quote could have come from an XBox Live gamer playing Halo 3. (OK, maybe that's a stretch.) But it's what Microsoft associate general counsel Tim Cranton told the New York Times in reference to a civil lawsuit the company filed in Seattle federal court against a family of three Canadians it accuses of engaging in $1.5 million worth of "click fraud."

In a blog post Monday, Cranton laid out his company's case against two Vancouver brothers, their mother, and various corporations believed to have been used to perpetrate the fraud. Microsoft got wind of the scheme when auto insurance companies complained of strange activity on their pay-per-click online ads.

Just what is "click fraud"? No, it's nothing to do with getting rickrolled. "Click fraud occurs when a person, automated script, or computer program imitates a legitimate Web surfer and clicks on an online ad for the purpose of generating a fraudulent 'charge-per-click' without having actual interest in the target of the ad's link," Cranton wrote. Microsoft has had to refund some $1.5 million in fraudulent ad charges as a result of this particular scheme.

What's the benefit of it? From the Times:

Microsoft’s theory is that Mr. Lam was running or working for low-ranking sites that took potential client information for auto insurers. The complaint said that he directed traffic to competitors’ Web sites so they would pay for those clicks and exhaust their advertising budgets quickly, which let the lower-ranking sites that he sponsored move up in the paid-search results.

His own, lower-paying ads would then be more visible, and more likely to be clicked on by legitimate customers.

Microsoft is seeking $750,000 in damages in the case – small change to the company – but Cranton says the move is mostly symbolic. “We have decided to become more active in the commercial fraud area on the enforcement side,” he told the Times. “The theory is you can change the economics around crime or fraud by making it more expensive.”


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