Microsoft lawsuit targets Vancouver Click Fraudsters

The Wall Street Journal is reporting today that Microsoft Corp has filed a lawsuit against three Vancouverites that it alleges committed a form of “click fraud” by improperly manipulating Microsoft’s online advertising service for profit.

Microsoft of Redmond, Wash., filed the suit in federal court in Seattle on Monday against three people and several corporations under their control. The suit seeks at least $750,000 in damages for an alleged scheme last year to drive up advertising costs for legitimate Microsoft advertisers while creating an advantage for the defendants’ own businesses.

Microsoft’s complaint alleges that three defendants in Vancouver, B.C. — Eric Lam, his mother Melanie Suen and his brother Gordon Lam — made more than $250,000 in profits through the scheme.

The WSJ’s Nick Wingfield contacted Gordon Lam by phone and he claims he isn’t aware of any lawsuit by Microsoft and refused to answer further questions.

In this case, Microsoft alleges that the defendants engaged in “competitor click fraud” where a perpetrator seeks to exhaust a competitor’s advertising budget while boosting the prospects of their own advertisements.

Microsoft said starting last year that legitimate advertisers using its online advertising service began experiencing waves of fraudulent clicks on their advertisements, which were promoting auto insurance and virtual currency used in the online game World of Warcraft. After an investigation, Microsoft said it traced the source of the allegedly fraudulent traffic back to the defendants.

Microsoft alleges that the scheme allowed advertisements for the defendants’ own sites to displace their competitors’ advertisements, creating higher traffic and revenue for the defendants businesses.

Anybody out there know Eric Lam?