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Thursday, September 15, 2005

Click Fraud Case to Stay in Arkansas

Outstanding. That's two strikes against moving the click fraud lawsuit case to federal court where the PPC networks including Google, Yahoo!, Overture, AOL, Ask Jeeves, and others wanted it to go. If you dont know, appearantly the federal court system favors big companies.

I was hired as a consultant by the legal counsel representing the plaintiff, Lane's Gifts & Collectibles and had the opportunity to hear about the case first hand.

My understanding from Steve Malouf, part of the legal counsel for Lane's Gifts & Collectibles, is that the appeals process is much more restricted in a state court if the judge orders the PPC networks to turn over sensitive data. There basically is not much the PPC networks can do and no appeals process that they can manipulate till the cows come home if the judge orders them to comply with orders they don't like. This is why this appeal decision was so important.

The last time I spoke with Mr. Malouf he mentioned that he believed that one of the major networks might be willing to 'make a deal' and work something out. What he was referring to was the possible establishment of a clearing house model where a 3rd party would be charged with making the call on click fraud claims.

Essentially the PPC network would allow the clearing house access to their data and the advertiser would submit their data and claim to the clearing house as well. This seems like a sound solution, one which would probably put the PPC networks back into a positive light with advertisers. Mr. Malouf believed it would probably take only one to lure more over. I wouldn't want to be left holding the click fraud bag if I was a PPC network. Of course, the likes of Google don't want outsiders to interfere with 98% of their billion dollar revenue stream. After all, every click fraud claim awarded is money they lose. And losing money never makes your shareholders happy.

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