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July 27, 2006

Click Fraud Settlement Approved

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It’s official. Judge Joe Griffin approved Google’s proposed $90 million settlement. For those keeping score, that’s Google and Lawyers, 2; Advertisers, 0.

Google’s statement:

“We’re pleased Judge Griffin has affirmed the settlement as appropriate and fair to advertisers. We look forward to continuing to manage invalid clicks effectively and provide our advertisers with an outstanding return on their investment.”

The Associated Press reports Google will give advertisers credits of $4.50 for every $1,000 spent in its ad network over the last 4.5 years. The lawyers, however, will split $30 million in cash. That sounds like a nice deal. For the lawyers, I mean.

More than 70 objections were filed (up from the 52 previously reported), most by small companies arguing they don’t have the resources to research claims that Google purposely allowed click fraud to drive up ad costs. According to the document, plaintiffs’ claims against Google were “dismissed with prejudice”. More than 550 companies chose to opt-out of the settlement.

It’s fitting that the bulk of the objections came from small businesses, as they are the ones who will suffer the most from this settlement. Hopefully, Google’s new, more transparent approach to click fraud will help them protect themselves in the future.

You can read Griffin’s complete ruling here (PDF). My favorite part is when he says the settlement was the result of a “good faith arm’s length negotiation” (a what?) by both parties and that the settlement will “result in substantial savings in time and resources to the Court”.

To the Court? Yes.
To the small businesses who suffered from click fraud at Google’s hand? No.

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