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Checkmate vs. Yahoo! Class Action Settlement

Aug 15, 2006
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What is this Case About?

Click fraud prevalence through the content and network search partners from Google and Yahoo has been a hot topic for the last few years. I just received notice concerning a Class action settlement with Yahoo as per the settlement notice as follows:

“Plaintiff Checkmate Strategic Group, Inc. claims that Yahoo! has breached its contracts with Class Person and committed unfair business practices under California Business & Professions Code S 17200 et seq., including improperly collecting revenue by charging and/or overcharging Class Persons for clicks that were click fraud, click through fraud, fraudulent clicks, click spam, invalid clicks, unwanted clicks, unqualified clicks, improper clicks, non-converting clicks, inadequately converting clicks, clicks that were not reasonably expected by Class Persons or otherwise claimed by Class Persons as clicks for which Class Persons should not have been charged, and improperly collecting revenue by charging and/or overcharging Class Persons for clicks where users did not actively choose the Class Persons’ listings (hereinafter “Challenged Clicks”).”

The Proposed Settlement

“Since filing the action, Plaintiff, through Class Counsel, has conducted an investigation of the facts, including review of Yahoo!’s billing procedures and Yahoo!’s click filtering systems, interviews with key Yahoo! personnel, and has analyzed the relevant legal and factual issues. Class Counsel obtained substantial information about the nature and extent of Yahoo!’s challenged practices through this process.”

“Although Yahoo! does not believe it has done anything wrong and continues to deny all claims and allegations of wrongdoing asserted in the Action, Plaintiff and Yahoo! agreed to enter into a settlement agreement after an extensive exchange of information and vigorous arms-length negotiation. If approved by the Court, the settlement agreement will result in dismissal of this case and final resolution of all claims raised. Such dismissal will release Yahoo! from future liability for the acts and practices complained of. The settlement terms are described in full in a document known as Stipulation and Settlement Agreement (hereinafter “Agreement”)1. The Agreement is available for your inspection at the clerk’s office of the United States District Court, Central District of California, Western Division. The terms of the settlement, in summary form, are as follows:”

i) Yahoo! shall launch an online traffic quality center, which will be available to its advertisers within 90 calendar days of the Effective Date of the settlement. The traffic quality center will include a resource center which will contain FAQs, best practices documents, traffic quality articles, enforcement guidelines, and an advice column.

ii) Yahoo! shall designate a Yahoo! employee as a traffic quality advocate who will be part of a traffic quality group to fulfill the function of fielding advertisers’ concerns regarding traffic quality, including its click fraud prevention efforts, within 90 calendar days of the Effective Date of the settlement.

iii) Within 90 calendar days of the Effective Date of the settlement, Yahoo! shall start a program in which it chooses at least three advertisers per year who will be invited to Yahoo! to obtain special access to the traffic quality team and additional information with respect to Yahoo!’s click protection system, subject to the advertisers’ execution of nondisclosure agreements.

iv) Yahoo! shall work with third parties in an effort to develop industry-wide standards that define click fraud, set forth standards with respect to the detection of click fraud and provide the public with periodic general evaluations regarding the effectiveness of providers’ efforts to filter and prevent the charging of click fraud to customers.

v) Yahoo! will temporarily lift its 60-day contractual provision to allow Class Members to make click fraud claims for the period from January 1, 2004 to July 31, 2006.

“Any Class Member that wishes to participate in the additional claims review process will have to complete the Assertion of Right to Participate form, and mail by certified or registered mail the completed form to the Claims Administrator on or before November 20, 2006.”

The Assertion of Right to Participate form is available for download at www.checkmatesettlement.com.

Selected Settlement Excerpts from the Notice at : http://www.checkmatesettlement.com/pdfs/Notice.pdf

Comments?

Filed under: Search Engine Marketing
  • OVER and out

    Did you notice how much the class will receive and how much the lawyers are going to get?

    If I read it correctly it said that the lawyers get around 5 MILLION DOLLARS and the class is splitting around ZERO DOLLARS!

    I think I'll opt out of this one. It sounds like Yahoo set this one up to avoid a class action suit that would make it pay.

  • http://www.partnercentric.com/msd Heather Paulson

    Excellent Observations, the interesting points also to consider is the marketing PR they will gain from the terms of the settlement, these items (i – V) look like PR moves not a justifiable reprimand or substantial punishment. I especially like this one:

    "Within 90 calendar days of the Effective Date of the settlement, Yahoo! shall start a program in which it chooses at least three advertisers per year who will be invited to Yahoo! to obtain special access to the traffic quality team and additional information with respect to Yahoo!'s click protection system, subject to the advertisers' execution of nondisclosure agreements." What point does this serve the greater community involved in advertising in their engine?

    So the main terms of the settlement is Yahoo gets to set up a fraud protection team, advertise it, create PR around the fact that it exists, and showcase it to three clients they select yearly

    wow…Wonder if they will use a lottery.

  • http://www.thoughtshapers.com Jeff Molander

    What I want to know: How it can be traced back to Yahoo itself — or more likely the IAB. Like an advertiser who just can't seem to stomach the dirty work of blackhat SEO (but wants to reap the benefits) who outsources it to affiliates who's to say that Yahoo isn't outsourcing it to the IAB? Considering their recent announcement it makes perfect sense.

    Call me a half glass full kind of guy yet again but this reeks of Google's recent "settlement". Conspiracy!

  • Anonymous

    Your insight is interesting Jeff.. This settlement you must submit in writing to be excluded from this class action.

    If you have purchased advertising on the Yahoo! Search Marketing System between January 1, 1998 and July 31, 2006, and do not elect to exclude yourself from the Class, you will be deemed to have entered in to this release and to have released the above-described claims.

    ( So you can not seek damages in the future)

    As a Class Person, you may elect to exclude yourself from the class settlement. If you wish to
    exclude yourself from the class, you must submit a written statement requesting exclusion from the Class on or before October 14, 2006 (hereinafter "Request for Exclusion"). Such request to be excluded must be personally
    executed by the Class Person, contain the full name, address, telephone number, and account number(s) of the Class Person requesting exclusion and the date(s) of the advertising campaign with Yahoo!, and must be
    returned to the Claims Administrator at Claim Administrator, PO Box 1340, Minneapolis, MN 55440-1340, by certified or registered mail. If you exclude yourself from the Class and the proposed settlement with Yahoo! is finally approved, you will not be entitled to receive any benefits of the settlement and will remain free to pursue
    any legal rights you may have against Yahoo! at your own expense, but the representative plaintiff and their lawyers will not represent you as to any claims against Yahoo!.

  • http://www.golfhomeflorida.com Moira Davies

    I am completely confused by this situation. I have spent a considerable sum with Yahoo and want to be part of the class action. What do I need to do. Can you please advise.

  • http://www.thoughtshapers.com Jeff Molander

    Here's an interesting development. They expect everyone to try and hunt down their errors this morning!

    "This is a corrected e-mail version of the Notice of Pendency of Class Action Proposed Settlement and Proposed Hearing Date for Court Approval. If you received an e-mail version of this Notice on August 15, 2006, please refer to this Corrected Notice instead."

  • Heather Paulson

    :: Hello Moira ::

    I suggest speaking with legal counsel concerning this matter, I am not at liberty to give legal advice. If you have spent vast sums I do suggest hiring an attorney.. Anyone know of a good one who understand PPC? Let me know I would like some names and numbers..

    Jeff: I saw that this morning still reading.. Need..More…Coffee..

  • http://www.maintour.com/utah/nut_bearlake.htm Bryce

    See also their website at checkmatesettlement.com on their is a form to ask for a claim form to ask for Yahoo to analyse your account to see how much click fraud happened there and to see how much of a refund you are entitled to.

  • http://IMRAN.com/media/ Imran Anwar

    I find this very strange. The legal note that I received asks us to go to http://www.checkmatesettlement.com and instead of some legal firm that link leads to this page http://www.revenews.com/heatherpaulson/2006/08/ch… which seems very strange. Just curious what this blog has to do with the legal notice of pendency of class action…!

    Imran
    http://imran.TV

  • Heather

    We put in a claim. We received a letter denying out claim. We put in a written review heard nothing. Now, we've been calling them and each time they tell us that an attorney or special master class council will call us back. NOBODY has called us back AT ALL.