Yahoo settles 'click fraud' lawsuit

In its settlement, Google is offering to give back less than 1 percent of the money spent on undetected click fraud and plans to make the payments in the form of credits that can used to buy more ads on its networks. Yahoo is giving advertisers the option of receiving cash refunds instead of credits.

All advertising claims submitted to Yahoo will be subject to the review of a retired federal judge who will oversee the refund process. Google's review of click-fraud claims won't be subject to any oversight.

The estimates on the prevalence on click fraud vary widely, partly because there are so many different interpretations of the practice.

A recently established index compiling information from more than 1,000 advertisers has estimated that about 12 percent of the clicks on ads running in the Google and Yahoo networks are fraudulent. Other studies have estimated the click fraud rate as high as 30 percent _ numbers that both Google and Yahoo have vehemently disputed.

Yahoo already has given advertisers billions of free clicks because it would rather err on the side of its customers when anything questionable occurs on its network, said John Slate, senior director of product development.

Darren Kaplan, an Atlanta attorney representing advertisers in the class action, praised Yahoo's approach.

"I can only conclude from Yahoo's actions that Yahoo both cares a great deal more than Google about its own customers and that Yahoo! has a lot more confidence in its prior click fraud detection efforts than does Google," Kaplan said.

Google spokesman Steve Langdon said the company continues to believe the Arkansas settlement is fair.

Kaplan and a group of other lawyers had filed a click fraud suit against Google in San Francisco federal court. That complaint was derailed when Google settled the Arkansas class action. Kaplan and Los Angeles attorney Brian Kabateck hope to prevent the Arkansas settlement from getting final approval in a two-day hearing beginning July 24.

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