CJ proposes $1 Million settlement over Malware Class Action

The class action filed against ValueClick subsidiaries CJ.com and BeFree has taken a new turn with ValueClick proposing a $1,000,000 settlement fund to be distributed to members of the class action suit.

The lawsuit was originally filed against CJ after the legal team for the class action determined that CJ allowed software publishers to highjack commissions due to other publishers using methods including downloadable toolbars, purchase helpers and other hidden software.

Terms of the settlement as outlined on http://www.cjsettlement.com are not only financial, but force CJ to have independent reviews and audits done on their practices & systems for managing network quality.

A settlement of this nature, if accepted by the courts, opens the doors to further similar class actions against other networks. I expect to see more lawsuits being filed against both CPA and Affiliate networks.

Interestingly enough an excerpt of the settlement agreement states:

“After deducting for payment of any money awarded by the Court in connection with representation of the Class in this litigation and settlement (for example, Incentive Awards made to the named plaintiffs, consulting fees, certain costs of class settlement administration, and related expenses), the balance of the Common Fund shall be allocated 70% to the Publishers and 30% to the Advertisers in a Publisher Fund and an Advertiser Fund.”

A review of the attorney’s fees, administration fees and other costs show that the biggest winners will indeed be the lawyers that filed the claim. They stand to get up to $500,000 of the settlement.

You’ve got to love America ;-)

About Jonathan Miller

I’m the CEO of Forge Media Investments Limited and its Online Marketing subsidiaries including the Forge Outsourced Affiliate Program Management & offerforge.com Affiliate Network.

I’m more talent scout & ambassador than Business Manager. I do strategy, high level planning & client engagement. I love getting my hands on a project, working with clients to figure out what they need then letting my team get on and do it.

I love finding new businesses for us to grow & opportunities for us & our clients to capitalize on.

I’m well known in Performance Marketing circles and judging by the fact that I keep getting invited back, seem to be rather an engaging, or at least a passable speaker.

I live in Johannesburg with my wife, 2 daughters and assorted pets! I travel relentlessly between our markets in the US, UK and South Africa and consequently my kids often refer to me as stranger ;-(

You can find Jonathan on Twitter: @JonathanAtForge .

4 Responses to CJ proposes $1 Million settlement over Malware Class Action

  1. Mike Hyland says:

    Meanwhile the CJ/VC bean counters raise the minimum for commission payouts to 100.00 so they can pocket the interest bearing float. Only the cookie stuffers, coupon cart poachers and the software4 BHO's will be paid monthy by CJ any more. The rest can die or pray they get to the magic $100.00 payout level.

    I thought I personally put an end to 100.00 network minimums during the 90's Revenews.com Netowrk CEO challenge and debate… LOL:>)

  2. Pat Grady says:

    Your trusted third party…

  3. kelliestevens says:

    Jonathan,

    Attorney's fees are not part of what comes out of the Common Fund (the $1M). The up to $500K is being paid separately. Item #54 in the Settlement document is where that info is located.

    What does come out of the Common Fund breaks down to something like this:

    Incentive Awards: up to $5k each to the class representatives. So that's $10k

    Consultants: $15k to the auditor

    Class Administration: $100K from the fund. $15k by the Defendents.

    So it's more like around $135k off the top of the $1M before the 70/30 split.

    Still no one should expect a large check out of this settlement, as is usual with class settlements.

    For me the larger import is to what degree and how effectively compliance efforts are changed.

  4. [...] summer, CJ settled a Malware class action lawsuit for $1M.  According to the terms of the settlement (see http://www.cjsettlement.com) after the lawyers [...]

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