LITTLE ROCK, Ark. – An Arkansas judge begins weighing objections this week to a $90 million class-action settlement between Internet search leader Google Inc.(GOOG) and advertisers who say they were victims of "click fraud."
Circuit Judge Joe Griffin has given preliminary approval to the settlement in the case against the search engine company, but at least 51 objections have been lodged over the agreement.
The two-day hearing begins Monday. Under the $90 million settlement — of which a third will be awarded to lawyers — thousands of advertisers worldwide will have a $60 million fund against which they can file a claim. No one will receive cash. Instead, the advertisers will receive advertising credits for future use with Google.
Lane's Gifts and Collectibles of Texarkana filed the lawsuit last year, alleging Google improperly charged advertisers for fraudulent Web site clicks that drove up advertising bills.
Advertisers say Google charged them for each click by a potential consumer that the advertisers allege were actually swindlers or mischief makers who repeatedly clicked on a link without a legitimate interest in the product or service.
Clicking on the ads, typically displayed at the top and sides of Web pages, triggered sales commissions even if the activity didn't lead to a sale. Click fraud cropped up several years ago as a way to drain advertising budgets or funnel illicit revenue to Web sites that belong to Google's network.
An independent report filed in court last week said that while Google appears to be doing reasonably well protecting advertisers from scam artists preying upon Internet advertisers, it remains unclear how much the system is being bilked under the ruse.
Since 2001, the ads have generated nearly $16 billion in revenue for Google and its partners, turning the Mountain View, Calif.-based company into one of the world's most prized businesses.
In the lawsuit, some advertisers have said the settlement shifts the burden of proof to class members because they'd have to certify the number of bogus clicks.
Google's attorneys have said the settlement is fair.