Google lawyers and plaintiffs involved in a click fraud suit are waiting to see if an Arkansas judge will approve a proposed settlement which involves a $90 million payment to resolve the case.
Google has already reached agreement with a majority of the plaintiffs, however a number of smaller retailers have protested, stating that their needs will not be met.
Plaintiffs in the Lane's v. Google case playing out in a Texarkana, Arkansas court room argue that the online search leader has not taken sufficient care to prevent click fraud, a scheme used to inflate the actual number of clicks an advertisement receives from Internet users.
Google says that it has done enough to minimize the incidence of fraudulent activity.
An independent 47 page report commissioned by both sides as part of the settlement deal determined that Google's efforts to combat click fraud were reasonable. However the judge must decide.
In the study, Dr. Alexander Tuzhilin, a professor of information systems at New York University, found Googleâ€™s specialists and engineers on the companyâ€™s â€œClick Qualityâ€ team and the â€œTrust and Safety Groupâ€ to be â€œwell-qualified and highly competent to perform their jobs.â€
Under the deal, lawyers representing the plaintiffs would receive $30 million while the other $60 million would be handed out as advertising credits, with none receiving cash.
Google would have to give a $4.50 refund for every $1,000 of advertising bought for the past 4 1/4 years. Since 2001, ads on Google have brought in more than $15.7 billion in revenue for the company and its ad partners, which include thousands of individual website owners.
Over 70 smaller companies who are part of the class action suit objected to the proposed settlement due to the difficulty in claiming their share the claim.
Google affirms that its settlement is fair. It also disputes the merit of the lawsuit.
Those who object to the amount of the settlement merely assume that undetected 'click fraud' is pervasive, and that they could prove this at trial, Google stated in a court filing. But Google contends that class members could never prove such a claim, because Google aggressively roots out click fraud, using highly sophisticated techniques and processes, and minimizes any impact it has on advertisers.
According to research from Click Forensics, approximately 14 percent of all ad clicks were fraudulent in the second quarter.
The most common form of fraud involves taking advantage of the pay-per-click advertising option. The more people click on an ad, the higher the advertising expense. Advertisers pay for the clicks alone, which doesn't necessarily translate into buying the product being sold.
The judge in the case is expected to give his decision by the end of the week.