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U.S. Gift Shop Sues Google Over Click Fraud Advertising

Lane's Gifts and Collectibles, a gift shop in Arkansas has filed a lawsuit against a number of Internet providers including Google, Yahoo!, Netscape, and America Online, for knowingly overcharging for their "pay per click" advertising services. Hoping that other advertisers will join as plaintiffs in a class action suit, the gift shop alleges that the defendants have conspired to create an online environment that causes advertisers to suffer damages. The gift shop claims that the advertising traffic is often generated fraudulently by people attempting to increase the advertiser's fees, not bona fide customers looking for information, and that the providers do not disclose that they are routinely and systematically overcharging for pay per click advertising revenue. The lawsuit was launched on February 4, 2005, and the defendants have recently filed a motion to transfer the case from state court to federal court.

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