Microsoft accuses science publisher of new, sophisticated click fraud

The office software giant has sued RedOrbit.com and its president Eric Ralls, claiming that it took part in an advertising scam designed to earn money from advertisers for clicks on adverts that were not genuine.

Click fraud is when ads are clicked on either by specially-hired people or by automated means to generate a payment to the publisher of a website. Advertisers often pay for slots on a per-click basis. Ad networks such as Microsoft's adCenter attempt to identify fake clicks, but are not always successful.

Microsoft said that RedOrbit and Ralls engaged in a new, sophisticated form of click fraud which masked the identity and location of the ad-clickers. It said it had called the activity 'click laundering' because, like money laundering, it disguises the fraudulent origin of the clicks.

"Click fraud schemes damage Microsoft as well as the Advertisers and legitimate Publishers participating in Microsoft’s adCenter advertising network or any advertising network," said Microsoft's lawsuit. "Advertisers are wrongfully charged for fraudulent clicks, Microsoft must expend resources in investigating and remedying the harms caused by the click fraud, adCenter operations are disrupted, the reputations of Microsoft and adCenter are damaged, and Microsoft's relations with the victimized Advertisers are harmed."

Crude click fraud can be detected by identifying that clicks have come from a small number of computers controlled by the fraudster. Microsoft said that this new fraud had been invented to ensure that clicks were coming from lots of different computers.

The company said that fraudulent clicks had been 'laundered' by software which tricked users into clicking on links which were not what they appeared, and in fact were adverts.

"Click laundering is a newly uncovered form of click fraud in which technical measures are used to make invalid ad clicks appear to originate from legitimate sources," said a Microsoft statement. "Through various means, including malware programs, fraudsters are able to trick innocent Internet users into visiting websites where they unknowingly click on advertisements. Click launderers also can further disguise the origin of those invalid clicks by using scripts and other methods to alter information that is sent to the ad platform."

"At its very essence, click-fraud is the theft of money from Advertisers by unscrupulous fraudsters. This thievery is all the more insidious because it can be difficult to detect," said the law suit. "Individuals and entities bent on fraud have grown adept at hiding the improper origin of the invalid clicks through technical measures meant to defeat the fraud-detection systems maintained, for example, by adCenter."

"Clicklaundering techniques include herding otherwise innocent individuals to websites where they can be tricked into triggering clicks on advertisements, and using scripts or other methods to alter the information sent, for example, to adCenter. Over time, click-laundering operations have grown in scale and sophistication and now constitute a major engine of click-fraud," it said.

Microsoft said that it was alerted to a potential fraud by a pattern of unusual traffic that suddenly appeared and was coming from apparent visitors to RedOrbit.com.

"In early-to-mid-2009, Microsoft determined that RedOrbit, one of the Publishers participating in the then-ongoing Microsoft adCenter Publisher beta program (since renamed “pubCenter”) was channeling a large number of clicks of questionable origin into Microsoft adCenter," said its lawsuit. "Advertisers were being charged for these clicks, and RedOrbit was being credited for them. Upon investigation, Microsoft concluded that RedOrbit was functioning as a conduit for a large number of fraudulent clicks into Microsoft’s adCenter network."

RedOrbit.com is a science news website based in Texas. Ralls told the Dallas Morning News that it had not engaged in fraud and that Microsoft's claims were false. He said the site had not profited from any fraud.

"We did not get one dime out of those clicks," he told the paper. "Microsoft did not pay us one dime."

Microsoft's general counsel said that Microsoft had to take the case to the courts to defend the integrity of its advertising network. "Microsoft will continue to take aggressive action working with industry and law enforcement to protect our platforms, customers and advertisers," he said.