Microsoft Sues Two For ‘Click Laundering’ – New Kind of Click Fraud
By Anna Johnson on May 24th, 2010Microsoft Corp. has filed two lawsuits over what it says is a new kind of click fraud called ‘click laundering.’ Microsoft’s lawsuits, brought in the U.S. District Court for the Western District of Washington, allege that the defendants – including web publisher RedOrbit Inc. and its president, Eric Ralls – could have, if gone undetected, defrauded advertisers of hundreds of thousands of dollars.
Click fraud or ‘PPC fraud’ typically involves someone (or an automated script) imitating a regular search engine user by clicking on an ad to generate a cost-per-click. Whilst Microsoft’s adCenter and other search engine advertising platforms use various measures to detect click fraud, click laundering is a new type of click fraud designed to overcome those measures.
Click laundering aims to bypass the search engine’s anti-click fraud checks by making invalid ad clicks seem to come from legitimate sources. Click laundering appears to involve the use of malware programs to trick innocent Internet users into visiting websites where they unknowingly click on advertisements. Click launderers may also disguise the origin of those invalid clicks by using scripts and other methods to alter information that is sent to the ad platform.
Microsoft has filed its lawsuits to stop the fraudulent behavior, and to recover the damages caused by the click laundering. The legal actions follow the settlement of Microsoft’s 2009 lawsuit against Eric Lam regarding click fraud in auto insurance verticals and World of Warcraft.
May 25th, 2010 at 7:42 am
RedOrbit does not, nor has it ever, engaged, assisted in, or condoned click fraud. We are disappointed that Microsoft has made these completely baseless allegations, and intend to defend against them vigorously.
RedOrbit was selected by Microsoft to help them test their BETA advertising platform, known as pubCenter, and we participated for approximately five months beginning in September 2008. An anomalous click spike occurred over a brief period of time in January 2009, and we immediately worked with Microsoft to identify the reasons for the occurrence, including providing them with complete access to our logs. At the time, Microsoft did not conclude that there was any suspicious activity on the part of RedOrbit and we discontinued working with them.
RedOrbit did not participate in the scheme Microsoft alleged and was never paid for the clicks in question. We do not understand why Microsoft has chosen to launch this unsubstantiated lawsuit and public relations campaign against RedOrbit a year and a half after it failed to conclude that we had anything to do with the events in question. We look forward to refuting these claims in court.
May 25th, 2010 at 8:07 am
Thanks for sharing your side of the story Eric.