Microsoft cracks down on adCenter click-fraud

Advertisers could be losing hundreds of thousands of pounds to click-fraud

Microsoft has filed two lawsuits in the US this week in a bid to crack down on click-fraud, which the company believes is undermining the online advertising market.

One suit has been filed against unidentified defendants, and the other against web publisher RedOrbit and its president Eric Ralls.

Microsoft investigators reported seeing "dramatic and irregular growth" in click traffic on two sites within its adCenter network. The firm said that, had the scheme gone undetected, advertisers could have lost hundreds of thousands of dollars.

"Online ad fraud is evolving in sophistication all the time, and fighting it demands vigilance and dedication to an honest and secure online marketplace," said Brad Smith, senior vice president and general counsel for Microsoft.

"We believe that a trusted marketplace is critical to internet commerce, and Microsoft will continue to take aggressive action working with industry and law enforcement to protect our platforms, customers and advertisers."

Tim Cranton, associate general counsel for Microsoft's Digital Crimes Unit, explained that click-fraud occurs when a person or computer imitates a legitimate surfer and clicks on ads to create charge-per-click revenues.

"Click-laundering is a technically advanced form of click-fraud designed to circumvent fraud detection systems by hiding the origins of fraudulent clicks and 'laundering' them through apparently legitimate intermediaries," he said in a blog post.

In some cases innocent web users could be lured into clicking on meaningless ads or links just to create more traffic.

"The unwitting user opens one of the parked domains, clicks a link or two, realises it's not what he or she is looking for and closes the window," said Cranton.

"What seems like a harmless digital dead end is, in fact, a laundered ad click that appears legitimate to an ad platform provider such as Microsoft but offers no value to the advertiser who would be charged for it."

Microsoft believes that the lawsuits will help to protect its own platform and promote the integrity of online advertising as a whole. The company is also hoping to recover damages.

"Microsoft takes fraud very seriously and we will continue to invest in technology, processes and legal action to help ensure that Microsoft Advertising and adCenter remain a trusted platform for advertisers," said Cranton.