According to a post at Search Engine Round Table, Bigreds.com has sued online marketing giant Yahoo! for a total of $1 million. It claims that Yahoo! Services did very little to prevent the click fraud that was happening at the Bigreds website, inspite of repeated notifications and complaints.

Bigreds is in the business of selling collectibles online and it said that, it had paid Overture Services which is a Yahoo! Search Engine Marketing Unit more than $900,000 over the span of four years (2002-2006). This fees was calculated on the number of clicks that the Bigreds advertisements received on Yahoo! and Overture affiliated websites.

In the court papers filed at U.S. District Court in New York, Bigreds said, “ These clicks were not actual traffic, but were fraudulent clicks. Affiliates of Overture used software programs, employed people, and/or directed people other than actual customers to click on plaintiffs links from keyword search results"

According to Bigreds, in the year 2006, Yahoo! did agree that there existed a click fraud problem. However, it only agreed to a sum of $17,000 as a refund. Furthermore, Yahoo's Overture unit at that time had access to technology and measures to prevent the click fraud, but it did nothing about the problem.

In the law suit, Bigreds also claim that, “ Overture was able to tell what was bad, who conducted the bad click, where it came from, what keyword was involved and generally had superior technology and access to records in its dominion that enabled Overture to determine what persons or entities or affiliates were involved.”

Similar incidents of click fraud have happened earlier as well with both Yahoo! and Google. In 2005, Yahoo! had to pay $4.5 million to settle a click fraud class action lawsuit. In another similar case settlement, Google had to shed a massive $90 million.

Click here to subscribe to our RSS feed to get a daily digest of news around search engine industry. PageTraffic SEO Blog is updated four times a day and is ranked as one of the best search engine resources blog by Pandia!