Google, Yahoo! and other sites face lawsuit on pay-per-click overcharging

by Staff, Brand Republic 06-Apr-05, 15:00

NEW YORK - Google and Yahoo! and other search engines are being accused of knowingly overcharging for pay-per-click advertising in a US lawsuit.

The suit has been filed by Lane's Gifts & Collectibles, an online giftshop based in Texarkana, Arkansas, which advertised on the internet.

It says that internet companies charged for advertising traffic that was not created by genuine customers.

The suit also claims that there is a conspiracy among the companies to create an online environment that harms advertisers, saying "[they] have grown the internet pay-per-click advertising market while failing to disclose that they have routinely and systematically overcharged and/or overcollected for PPC advertising revenue from their customers."

Other companies named in the suit include Netscape, Overture, Time Warner, America Online, Ask Jeeves, Go.com, Lycos, Looksmart and Findwhat.com.

SEMPO, the search engine marketing trade body, has published research saying that 70% of online advertisers are concerned about pay-per-click advertising fraud. The body estimates that $4bn was spent on search engine marketing in the US and Canada last year.

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