back to article Microsoft sues family over alleged click fraud

Microsoft has filed its first-ever lawsuit over click fraud, seeking $750,000 in damages from a Canada-based trio who allegedly orchestrated a massive online scam via its pay-per-click search ads. "Microsoft’s Internet Safety Enforcement team has a long history in enforcement efforts on issues such as malicious code …

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Ummmm

I dont really get how this is 'click fraud'.

They clicked on links.....surely thats the point?!

Ok, I've never done the whole advertise online thing, but its gotta be a pretty common thing?

I mean, you cant have a pop at someone for doing basically what was intended!?

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Boffin

What ads?

I keep hearing about all of these ads, but ever since I installed adblock plus into Firefox with a couple of its more popular filter sources, and threw in a wildcard to block Javascript at Google (the advertising monopoly), I haven't seen a thing. Ad free since .. em .. 2004?

I've already paid to access the Internet, I don't see why I need to pay again.

Thanks for reading my comment - content cost gratis.

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Tough shit.

Counting clickthroughs is, at best, a weak heuristic for measuring ad impact. Its status as a de facto standard shouldn't imply that anyone in the industry has a god-given right to utilize it successfully.

You have no idea why any click happened. The clicking user is probably not even aware of the financial transaction that occurs as a result. If the clicker did not agree to any conditions of clicking, I don't see how he can be found guilty of fraud for "misusing" a hyperlink.

If your business model is based on selling something using such terribly inaccurate and easily-manipulated metrics, sorry, but I'll not be quickly convinced that there's criminal activity afoot just because your numbers turned out shit-backwards wrong.

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RE: Ummmm

CLick fraud is having a some sort of automation set up where a machine will click on the link several hundered times more than what is normal for wetware-based systems will do. The point of online advertising is to get real people to see the ads and influence their buying habits. This is how capitalism works.

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Boffin

@ Benny - Simplified...

It's Pay per click (PPC). If someone clicks on an ad, Google pays the publisher of the add and collects a fee from the advertiser. So if you make an add and get a group of people to pull up a similar search on Google (or YaHoo!) that causes your add to pop up, your group clicks it you collect a payout. More clicks, more payouts. But if that add gets a huge number of clicks in a particular time period for the amount that was paid -usually a flat fee- then something may not be right.

MS uses a bid-base PPC. It pays more but it has more hooks and tracers. If your ad gets the highest bid, it's placed at the top and it's shown more and you get a larger payout.

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@Christopher Ahrens

"The point of online advertising is to get real people to see the ads and influence their buying habits."

That may be the point, but conventional Marketing clearly doesn't "get" the Internet. My box, my rules. What ads?

Don't get me wrong, I can easily filter what I see online with my own wetware (close to thirty years of Usenet will do that for a guy) ... but having software filter all that crap, thus saving bandwidth, is a no-brainer. I don't pay attention to the ads out of reflex, so why bother displaying them on my computer? There is a reason that killfiles were invented.

Even my 70+ year old technophobe mother found & installed AdBlockPlus without any prompting from me ... and then installed it on my 94 year old great-aunt's computer. Online advertising as a profit center is doomed.

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@AC (What ads?)

You didn't pay to access the WWW, you paid your ISP to route TCP/IP traffic. The content on the other end may be "free" (access without monetary donation) or not, but you don't automatically get the right to access it.

Consider this; The revenue from advertising is what keeps the site free. Hosting, bandwidth, and maintenance of content are not cheap. It takes time, effort, and sometimes considerable personal investment of funds. By disabling advertisements, you take a little more of their income away from them, no matter how small.

Next time you go to your petrol station, tell them that you've already paid for your car, so you don't want to pay for fuel to run it, or that the fact that the majority of the energy released in combustion is heat means that you are only paying for the percentage which is used in motion. See how far your "I've paid once, I'm not paying again" mentality gets you.

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@jake - Online advertising doomed?

"Online advertising as a profit center is doomed."

I think not - that would make Google worthless. Advertising is like Spam. Spam still gets created because someone somewhere is still reading it and clicking on the viagra links.

Likewise people will always be clicking on ads. In truth, they can be quite helpful if you are looking for a service. It's the old saying: "I know that half of my advertising dollars are wasted ... I just don't know which half.".

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Wooly, very wooly

Rememeber the old saying "Sheep were meant to be shorn". IMHO anyone in this day and age who spends good money on "pay per click" makes a Merino look like an Einstein! Baaah!

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Exactly how many clicks are legal?

If someone wants to click on something for any reason, I feel they should have the right to do so. If you can only click a certain number of times, perhaps that should be in TOS. I would like to know what kind of contract Microsoft has with the the clickers.

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Anonymous Coward

Still don't see the fraud

If you're paying for the click, it was clicked, so you paid. Just because it's not someone interested in the ad doesn't make any difference. You should set up your metrics better to reflect real customers.

If you setup a freephone number, where you pay for your customers to call you, is it fraud if i sit on the line 24/7 causing you to pay for it? No, it would be fraud if i found some way of making you pay without me calling!

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I wonder what is the legal basis for the fraud ...

...the defendents didn't convert any of the plaintiff's property to their own use.

If it's fraud to click on a PPC ad without any intention of buying the goods or services the ad represents then that's a very big legal net.

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Anonymous Coward

A question for Player_16

I've never really looked into Click Fraud before, so much like Benny I was kinda confused by how this can be deemed as it. In your response, you said...

"If someone clicks on an ad, Google pays the publisher of the add and collects a fee from the advertiser."

...this may well be a stupid question but I don't get who Google (or Microsoft or Yahoo) pays. I thought they were the publisher, as they are the ones publishing the advert. From your post, it sounds as though this isn't the case.

I understand how this threesome could be making money, as described in the article...

"Redmond suspects that Lam was hitting competitors with fake clicks so they would quickly exhaust their daily ad budgets. That way, his ads would pop to the top of Microsoft's listings. Microsoft's complaint says that when surfers clicked through to Lam's sites, he would collect their info and sell it on to auto insurance companies."

...So, as I understand it, they weren't actually getting any money from Microsoft..? Rather, they caused their competitors' adverts to get removed so that their own adverts would appear instead. Then they harvested the data of the users who clicked their ads and sold that data to those companies whose adverts they had caused to get removed.

So the genuine insurance companies got stung twice... once because they had paid Microsoft to publish adverts which weren't really being seen by their intended audience, and then again because they were buying data from Messieurs Lam and Madame Suen (although this was presumably their own choice).

I've gotta admit that I'm still not sure why Microsoft are suing these people. They clicked the links repeatedly (or arranged for others to click them).... what's to stop me from unintentionally doing the same. Am I breaking the law if I click a link, which is only there to be clicked, more than once?

Sheesh, this is all kinda confusing. I'm off to read up on encryption algorithms... at least that makes sense!

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@AC - Still don't see the fraud

It's simple. It's not the clicks themselves that are fraudulent it's the way they got their ads to the top of the list so that people would click on them. "Click Fraud" is probably a misnomer in cases like this. "Search Fraud" would be a better term, but Click Fraud seems to be the generic term now.

The advertisers generate their own automated searches to force their own ads to the top of the list. Whether or not this is criminal or indeed moral is a moot point, it's certainly in breach of the terms of their contract with MS.

My question would be: Why, as usual, are a US company going after foreigners in a US court? Surely even if the court finds in favour of MS all the defendants have to do is steer clear of the US (not hard to do) and they are in the clear. Surely if they went through the Canadian courts and won then the defendants would have nowhere to hide.

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@Jake

"Even my 70+ year old technophobe mother found & installed AdBlockPlus without any prompting from me ... and then installed it on my 94 year old great-aunt's computer. Online advertising as a profit center is doomed."

So when are you going to start paying for sites like The Register then, or are all the people and companies involved going to continue to provide their services for free, just to please you?

Or would you prefer that the advertising merged with the content, so you could never trust an article or review again?

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Alert

@AC

The publisher is the asite owner where the add is shown - ie for ads here clicks are paid to elreg.

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Alert

Fraud!

very stretch definition...

They commited fraud because they clicked without intention to use the sites and for personal gain. = FRAUD

MP rents empty house witout intention of living there solely for personal gain (allowence for second home) = NOT FRAUD

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Flame

its not fraud

IT may be annoying, but I doubt if there is anything anyone can do about it. I suggest that someone make a "super-adblock-plus-plus" that automatically clicks on all ads displayed on a page in a separate micro window and then closes them, and does it every N seconds. If this were a firefox plugin it would mean the death to online advertising, and there is nothing anyone could do about it.

I personally think these guys were very clever and have a great business model. Insert yourself in to the supply chain and collect a fee for doing nothing. If the "victims" in this case don't like what happens in an uncontrolled pay per click environment, then may they should re-consider their options.

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Coat

RE: A question for Player_16

Nearly there. MS is suiing for two reasons: (1) they had to refund the ad monies they collected from the legitimate advertiser in order to keep them happy, (2) if they fail to act then word with get round and they will have more difficulty selling future ads.

It's all about protecting the revenue stream. Hat? Coat? Follow the money.

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Anonymous Coward

The Model is wrong

in fact Google are pretty bad at this as well. You should be able to block IPs at least from registering, but beyond that it is just not a viable business model.

The irony is the problem of determining human or automation was fully understood at the start of the web, and what these companies are doing is trying to make what is a legitimate action illegal.

Here is a clue don't run offers like this, or base business models on it, it is too open to abuse and because of semi acceptance it has hampered the evolution of correct solutions.

It is like opening a shop, and just getting people to pop the cash in a tin for what they take, now you can bleat on about if people steal it is just wrong, but it is done so they don't have to pay staff, which effects the economy as a whole.

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@AC 17-06-09 09:49

In this context, the "publisher" is the website displaying the ad. It's the income that keeps the website free. The advertiser is the company that paid the search company to place the ad.

It's a type of fraud because the links are intended to be clicked on by wetware, not software. There's no way three people repeatedly clicking on the same advertising links would drain the pot of advertising money for an ad. It had to be automated, and it has to be intentional.

And yes, you can be charged with fraud for repeatedly calling a toll-free number with the intent of causing the provider of the number to lose money. Although I will admit I've thought about doing that a couple of times.

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@Robin 2; @Martin 19

""Online advertising as a profit center is doomed."

"I think not - that would make Google worthless"

Correct. The paper value of google is highly overrated. Don't believe me? Watch what happens the first time a major share holder sells out. It'll be Holland & tulips & 1637 all over again.

"So when are you going to start paying for sites like The Register then"

As soon as I start paying for Usenet and other similar forms of text entertainment.

"or are all the people and companies involved going to continue to provide their services for free, just to please you?"

Nope. They are going to have to find a new business model, or go under. Simple economics.

"Or would you prefer that the advertising merged with the content, so you could never trust an article or review again?"

Here's a hint, buddy: This is ENTERTAINMENT, not education. Learn the difference.

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Seriously?

"Here's a hint, buddy: This is ENTERTAINMENT, not education. Learn the difference."

Okay Jake, I'm almost sure you are trolling, but let's assume that you are as mentally and emotionally backward as you appear.

Firstly, even entertainment is seldom free - even your colouring books have to be paid for by someone. The Reg gets some of its revenue from advertising, and I prefer that rather than, say, the writers being paid by the people whose products they are reviewing.

Secondly Google's model is working, and the more that cheaters such as those described above are hammered in the courts, the better it will work.

To those people who can't understand why clicking repeatedly on a link is wrong, lets go through it one more time, and then you can join Jake with his crayons. Firstly, you can click on a link as often as you like (I imagine it would keep some of the commentards here amused for hours.) Microsoft, Google et al have software that will just ignore you. (I know microsoft software often does that in any case, but that's another story.)

However, as you will see from reading the story (you DID read it, didn't you? Even the long words?) The miscreants in this case were advertisers with Microsoft. The words " his ads would pop to the top of Microsoft's listings" are the clue in this case. Now when you sign up as an advertiser, you have an agreement called a contract (your parents will explain about these when you get older) in which you promise not to engage in the kind of jiggery-pokery these two were up to. So they cheated and have to give back the money. And the amount of money should make it clear that this business model generates a lot of cash.

Clear? Oh, and by the way Jake, you may consider this post education, not entertainment.

sheesh!

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Ads offend me

Martin 19: "Or would you prefer that the advertising merged with the content, so you could never trust an article or review again?"

That's what's happening now. No, I don't prefer it.

Many commercial sites are not worth the paper they are printed on. I don't like them and I don't usually go there. Content providers like the Reg are a different story and I don't know the answer, but ads are a terrible way to fund sites. Ads degrade the user experience and clog up the tubes. I personally do the advertisers a favour by using Adblock. I am more likely to buy a product which hasn't irritated me by putting advertising in my face.

As for search engine rankings, many click hungry sites make finding things very difficult. Try searching for information on an older computer and see how many memory salesmen get in the way. Look for information on older cards and see how many driver links clog the list. Most (not all) of these sites are just jerks looking for clicks.

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@Maty

Maty, you do realize that your ad hominem filled diatribe has nothing to do with what I wrote, right?

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