Microsoft sues over 'click laundering' fraud

The software maker accuses science news aggregator RedOrbit of engaging in a scheme to get paid for fraudulent clicks, but the site's operators deny accusations.

This graphic shows a sharp spike in clicks over a 30-day period allegedly from click laundering, which Microsoft estimates represents about $250,000 worth of fraudulent advertising payments. Microsoft

Microsoft filed a lawsuit this week accusing a Web site of engaging in a new type of click fraud called "click laundering" by getting credit for clicks on ads that were made by botnets or unsuspecting users on a site set up for that purpose.

The lawsuit names RedOrbit, a science news aggregator, as defendant, while a second suit names John Does to cover multiple unknown defendants who allegedly participated in click laundering on Microsoft's AdCenter network, Microsoft said in a statement.

To get around click fraud detection technologies, fraudsters are using so-called "parked" Web sites to launder the ad click traffic through, Richard Boscovich, a senior attorney in Microsoft's Digital Crimes Unit, said in an interview with CNET.

The traffic results from botnets of compromised personal computers that are programmed to click on the ads without the computer user knowing it. Or it can come from malware hiding on computers that hijacks the browser, taking the Web surfer to what looks like a legitimate search site, for example. So when the computer user clicks on what looks like a search result code that is hidden on the site, it registers as a click on an ad instead, Boscovich said.

RedOrbit President Eric Ralls denied the allegations.

"RedOrbit does not, nor has it ever, engaged, assisted in, or condoned click fraud," he said in a statement on Friday. "We are disappointed that Microsoft has made these completely baseless allegations and intend to defend against them vigorously."

Microsoft asked RedOrbit to help in a beta test of its PubCenter platform, and the site did so for about five months, beginning in September 2008, according to Ralls.

"An anomalous click spike occurred over a brief period of time in January 2009, and we immediately worked with Microsoft to identify the reasons for the occurrence, including providing them with complete access to our logs," he said. "At the time, Microsoft did not conclude that there was any suspicious activity on the part of RedOrbit, and we discontinued working with [Microsoft]."

More information about click laundering is available on the Microsoft on the Issues blog.

 

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