Microsoft seeks $750,000 in damages in a click fraud lawsuit

On Monday Microsoft Corp launched a lawsuit against three individuals accusing them of running a "massive" click fraud scheme that involved harnessing hundreds of thousands of computer IP (Internet protocol) addresses to target advertisers promoting auto insurance and the World of Warcraft on-line game.

According to the filing to the U.S. District Court for the Western District of Washington Eric Lam, Gordon Lam and Melanie Suen, of Vancouver, Canada, breached Microsoft's adCenter contract by running a click fraud scheme along with several companies and other, unnamed parties. It is the first time Microsoft files a lawsuit over click fraud. The company is seeking for at least US$750,000 in damages.

The investigation was started by Microsoft on March 24, 2008. At the time the company got a number of complaints that reported suspicious activity from auto-insurance advertisers that use its sites. There had been a large spike in the number of searches submitted that exactly matched the keywords on which the insurance companies had bid and within a short time the top search results were being clicked. Microsoft found hundreds of thousands of IP addresses were being used to disguise the true source of the traffic.