Class Action Law Suit Against Yahoo! for Click Fraud & Spyware

May 3, 2006 • 7:40 am | comments (3) by | Filed Under Legal Issues in Search

WebmasterWorld has a thread named Class Action Suit Filed Against YSM which discusses a Washington Post report that Yahoo is being sued for "syndication fraud." Syndication partners are those who place Yahoo! ads on their Web sites and products. Most of the law suit is based on Ben Edelman's uncovering of PPC Ads Found In Spyware With Auto Click Fraud.

A class-action lawsuit filed Monday against Yahoo! Inc. and group of unnamed third-parties accuses the company of engaging in "syndication fraud" against advertisers who pay Yahoo to display their ads on search results and on the Web pages of partner Web sites. The suit claims that Yahoo displayed these advertisers' online ads via spyware and adware products and on so-called "typosquatter" Web sites that capitalize on misspellings of popular trademarks or company names.

Potentially more explosive is the plaintiff's claim that Yahoo regularly uses its relationship with adware and typosquatting sites to gin up extra revenue around earnings time, alleging that the company is conspiring to boost revenue by partnering with some of the Internet's seamier characters. From the lawsuit:

The article also mentions typo-squatting issues where people go to a Web address, that is a typo of the Web address they really want to go to. They see ads on the site and click on them. This is a big business and has always rubbed people the wrong way. For some reason, Google's Domain Park, just now is getting a lot of attention. We wrote about it back in early January under the title DomainPark - AdSense for Domains Sparks Huge Forum Debate.

Bottom line with this law suit, probably like with Google, Yahoo! will settle out of court for a relatively small sum. Who will win here? The lawyers.

Forum discussion at WebmasterWorld.

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