According to Kristin Danley-Greiner at Legal Newsline, a California-based advertiser, Gurminder Singh, filed a lawsuit against Google claiming that the Internet giant was responsible for untold losses because of fraudulent clicks on ads. This is becoming a growing trend as we see more and more cases related to click fraud in Pay Per Click advertising. It may be some time before this case is settled, so for now, let’s take a closer look at the issues involved in deciding whether or not to go to court over click fraud.
To start with, there are two main types of lawsuits: class action lawsuits and private actions where you go to court on your own. In this post, we will examine the pros and cons of each, and get a better understanding of what it all means for you, the potential plaintiff.
Basically, a class action suit is when a group (known as a “class”), having similar claims against another party, comes together to collectively file suit as one. This class is represented as a whole and shares the outcome of the case. The idea of strength in numbers sounds great in theory but the reality is much different. According to an article in Forbes;
Researchers at Mayer Brown looked up every consumer class action in federal court in 2009 reported by two major commercial litigation publications. They found that in five of six cases where settlement distribution data was actually available, the percentage of class members who actually got money ranged from a high of 12% down to a low of 0.000006%. (The sixth case had close to a 100% payout ratio, but it involved the Bernie Madoff scam.)
But that’s just part of the story…
These cases are often times very complex and can take much longer than conventional cases. In addition, you are part of a group and your individual needs may not be addressed. Let’s not forget that in most cases, if you are part of a class action you forfeit your right to file any individual suit in the future. Class members generally don’t get the opportunity to play a role in the process, so you will have very little control over the outcome. Finally, even if you win your case you are not likely to be compensated with a reasonable amount.
There are a lot of jokes that could be made here but the simple fact is that your legal team gets paid whether you win or lose. And since these types of cases tend to go on for a long time, that is just more and more legal fees that your team gets to take home in the end.
As mentioned in #1, a class action lawsuit can go on for an extremely long time. To be more specific, some cases can take up to 5 years or more to settle. Who has the time for that? Especially considering the fact that you are not likely to receive much if anything when it is all over.
In short, if you look at the history of lawsuits against Google for click fraud you will see that at the end of the day, they don’t really lead to any type of change.
Let’s face it, it’s just not worth your time in the end. For starters, it is not certain that you will win. Either way, you will be stuck with extremely large legal fees and the process may take what will seem like forever. Not only that, it is almost impossible to prove your losses.
The major factor working against you is a concept known as the economic loss doctrine. In the case of trying to prove you were a victim of click fraud, you need to show two things: (1) that you were paying for clicks that were not legitimate; and (2) that you were damaged in some way. The damages that you suffered were that (1) you paid for the click, and (2) your ads were removed from the Google search results prematurely, thus depriving you of the chance to convert real users.
It is these lost opportunity costs that can be the biggest monetary losses. While you might have a decent case, recoveries for this second type of loss rarely hold up in a court of law, and the courts typically won’t compensate you.
Usually, the word “fraud” is associated with some sort of criminal activity, but not when clicks are involved. It might be hard to believe but there are no current criminal laws to protect you from click fraud. Authorities and the criminal justice system just don’t really care that much, partly due to the fact that it is too difficult to enforce. Your only option to even try to get some sort of justice is through civil cases and as we mention above, the odds are stacked against you.
Unfortunately, there is not much that can be done at this point after you have fallen victim. The good news is there are ways to protect yourself before this happens to you.
Let’s say that Google is like a landlord and you are renting space in their building for your business. If you get robbed, is it really your landlord’s fault? Probably not. In most cases, it is your responsibility as a business owner to protect your rental property and invest in quality locks and a good security system. The same goes for your ads. You need quality locks and a good security system to keep you from being robbed.
To sum up, Instead of waiting for fraudulent activity to occur and then trying to go up against a giant like Google in a court of law, the best plan is to invest in a click fraud detection and prevention system. This way, you will be protected no matter what!