Microsoft on Monday filed a lawsuit against three individuals residing in Canada for allegedly promoting the sale of World of Warcraft currency and collecting auto insurance referral fees through click fraud.

In a complaint filed with the U.S. District Court in Seattle, Microsoft charges that Eric Lam, Gordon Lam, and Melanie Suen, of Vancouver, British Columbia, though various companies, abused Microsoft's adCenter by conducting a campaign of competitor click fraud.

Competitor click fraud is a way of gaming keyword ad auctions in which advertisers receive ad placement based on a bid price. The scheme involves using automated methods to click on a competitor's pay-per-click ads in order to deplete the competitor's ad budget and to allow one's own less-expensive ads to be shown.

"Microsoft gathered substantial evidence that a handful of individuals were likely responsible for these click fraud attacks, which affected online advertisements related to auto insurance and the online role playing game, World of Warcraft," Microsoft's associate general counsel Tim Cranton said in an online post Monday. "Once we became aware of the click fraud attacks, we quickly took action to address any impact on advertisers and to enhance safeguards to further protect our network."

Microsoft is seeking an injunction against the defendants and $750,000 in damages, three times the estimated $250,000 allegedly earned by the defendants. The company's complaint states that it reimbursed advertisers for $1.5 million as a result of the defendants' alleged actions.


The overall incidence of click fraud declined in the first quarter of 2009, according to Click Forensics. Tom Cuthbert, the click auditing company's president, attributes this to progress Google and Yahoo have made blocking click fraud driven by botnets. However, the company reports that click fraud from malicious scripts -- JavaScript code that executes with the loading of a Web page -- is on the rise.

Microsoft is suing the two Lams and Suen for violating the Microsoft adCenter terms and conditions, among other charges. However, the company appears to have little interest in determining whether its advertisers are involved in breaching other contractual agreements.

Blizzard Entertainment, which owns World of Warcraft, forbids the sale of World of Warcraft gold though the game's terms of service agreement. Although eBay has tried to ban the sale of virtual goods like World of Warcraft gold, Google's, Microsoft's, and Yahoo's ad networks all display ads offering to sell World of Warcraft currency for real money.

Neither Microsoft nor Blizzard immediately responded to a request for comment.



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