Judge approves Yahoo "click fraud" settlement

A federal judge yesterday gave preliminary approval to a settlement in a lawsuit that accused Yahoo Inc. of not adequately protecting advertisers from a practice known as "click fraud," the Wall Street Journal reported.

Under the terms of the settlement, Yahoo would pay about $5 million in legal fees and extend its period for reviewing advertiser click fraud complaints to include disputed charges since January 2004, rather than addressing complaints received only within the past 60 days, the newspaper said.

The preliminary approval was granted by U.S. District Court Judge Christina Snyder in Los Angeles.

The practice of clicking on online advertisements with the intent of driving up a business rival's costs or for earning commission is known as click fraud.

On Yahoo and its partner Websites advertisers pay each time ads are clicked on. Investors have expressed concern that click fraud might be a significant problem that could threaten advertiser confidence and profits, the Journal report said.

"We're very pleased with the terms of the settlement," Reggie Davis, head of litigation for Yahoo, Sunnyvale, Calif. told the Journal.

The suit was brought by private investigation firm Checkmate Strategic Group Inc. of Delray Beach, Florida, as a class action, the newspaper said.

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