Microsoft sues alleged click fraudsters

A year-long game of electronic sleuthing has culminated in a lawsuit against three alleged "click fraudsters", whom Microsoft accuses of manipulating its online advertising business.

The tech giant sued three Canadian residents who it says were fraudulently clicking on the adverts that appear on its MSN search engine, costing it at least $750,000 (£456,000) in profits, according to a Seattle court filing.

The emergence of search-based advertising – where companies bid to have their ads appear at the top of search engine results and then pay depending on how many people click on the ads – has revolutionised the marketing industry.

But it has also spawned a whole sub-industry of fraudulent schemes to manipulate the system for personal enrichment, and Microsoft says that Gordon Lam, Eric Lam and Melanie Suen, of Vancouver, were running at least one such scam at its expense.

Eric Lam is alleged to have been making money from selling sales leads to insurance companies, and manipulated MSN's search results so that his own ads appeared higher in the results. According to the theory set out by Microsoft, Mr Lam generated fake clicks on rival firms' ads, so that they would quickly exhaust their marketing budgets.

Microsoft first noticed a peculiar spike in the number of searches for "auto insurance quote", and in the number of people clicking on associated ads, more than a year ago. Proxy servers were scrambling the address of computers behind the searches, but the company's engineers embarked on what it calls a year-long game of cat and mouse, limiting or barring traffic from individual servers and forcing the Lams to use alternatives, it is alleged. Over that period, the company was forced to pay back $1.5m (£900,000) in revenue to advertisers that were charged for the fake clicks.

Attempts to contact the defendants have been unsuccessful although, reached by The New York Times, Gordon Lam said he had not yet seen Microsoft's lawsuit and declined to comment further.

Click fraudsters either pay individuals or, increasingly, use automated programs hijacking personal computers to generate bogus clicks. The motives for click fraud are manifold. Companies may use the scam to jack up "pay per click" bills for rivals. Google and other search firms also place links to its advertisers on affiliate websites and share revenues with those affiliates, giving an incentive to inflate the number of clicks. Additionally, some mischievous computer programmers are simply having fun at search engines' expense.

ClickForensics, a technology consultancy that monitors internet traffic, believes 14 per cent of all clicks on online adverts were fraudulent in the first quarter of this year, down from an average of more than 16 per cent in 2008.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Mortgage Administration Team Leader

Negotiable: Recruitment Genius: This company prides itself on its ability to p...

Recruitment Genius: Mortgage Advisor

Negotiable: Recruitment Genius: This company prides itself on its ability to p...

Ashdown Group: Solvency II Project Manager - 10 month contract - £800 p/d

£800 per day: Ashdown Group: A highly successful, global financial services co...

SThree: Trainee Recruitment Consulant

£20000 - £25000 per annum + competitive: SThree: SThree are a global FTSE 250...

Day In a Page

A Very British Coup, part two: New novel in pipeline as Jeremy Corbyn's rise inspires sequel

A Very British Coup, part two

New novel in pipeline as Jeremy Corbyn's rise inspires sequel
Philae lander data show comets could have brought 'building blocks of life' to Earth

Philae lander data show comets could have brought 'building blocks of life' to Earth

Icy dust layer holds organic compounds similar to those found in living organisms
What turns someone into a conspiracy theorist? Study to look at why some are more 'receptive' to such theories

What turns someone into a conspiracy theorist?

Study to look at why some are more 'receptive' to such theories
Chinese web dissenters using coded language to dodge censorship filters and vent frustration at government

Are you a 50-center?

Decoding the Chinese web dissenters
The Beatles film Help, released 50 years ago, signalled the birth of the 'metrosexual' man

Help signalled birth of 'metrosexual' man

The Beatles' moptop haircuts and dandified fashion introduced a new style for the modern Englishman, says Martin King
Hollywood's new diet: Has LA stolen New York's crown as the ultimate foodie trend-setter?

Hollywood's new diet trends

Has LA stolen New York's crown as the ultimate foodie trend-setter?
6 best recipe files

6 best recipe files

Get organised like a Bake Off champion and put all your show-stopping recipes in one place
Ashes 2015: Steven Finn goes from being unselectable to simply unplayable

Finn goes from being unselectable to simply unplayable

Middlesex bowler claims Ashes hat-trick of Clarke, Voges and Marsh
Mullah Omar, creator of the Taliban, is dead... for the fourth time

Mullah Omar, creator of the Taliban, is dead... again

I was once told that intelligence services declare their enemies dead to provoke them into popping up their heads and revealing their location, says Robert Fisk
Margaret Attwood on climate change: 'Time is running out for our fragile, Goldilocks planet'

Margaret Atwood on climate change

The author looks back on what she wrote about oil in 2009, and reflects on how the conversation has changed in a mere six years
New Dr Seuss manuscript discovered: What Pet Should I Get? goes on sale this week

New Dr Seuss manuscript discovered

What Pet Should I Get? goes on sale this week
Oculus Rift and the lonely cartoon hedgehog who could become the first ever virtual reality movie star

The cartoon hedgehog leading the way into a whole new reality

Virtual reality is the 'next chapter' of entertainment. Tim Walker gives it a try
Ants have unique ability to switch between individual and collective action, says study

Secrets of ants' teamwork revealed

The insects have an almost unique ability to switch between individual and collective action
Donovan interview: The singer is releasing a greatest hits album to mark his 50th year in folk

Donovan marks his 50th year in folk

The singer tells Nick Duerden about receiving death threats, why the world is 'mentally ill', and how he can write a song about anything, from ecology to crumpets
Let's Race simulator: Ultra-realistic technology recreates thrill of the Formula One circuit

Simulator recreates thrill of F1 circuit

Rory Buckeridge gets behind the wheel and explains how it works