Affinity Engines, a social networking service provider, filed a lawsuit against Google on May 25, 2004. The suit claims that Google's social network, Orkut, is using a source code that was stolen by Orkut Buyukkokten, an engineer previously employed by Affinity. The suit also alleges that Buyukkokten promised he would not develop a competing social-networking service when he left to join Google. Google has said the allegations are without merit.
Click fraud presents a more serious threat. Google search-related advertising is known as pay-per-click, because advertisers don't pay for the display space; they only pay Google when an Internet user actually clicks on the link. The price per click depends on the going price for the search term in question, which is determined by auction.
But there have been numerous examples of times when advertisers have had to pay for clicks that turned out to be manipulated or fraudulent in some way.
In June 2005, Click Defense Inc. filed a class action suit, alleging that Google has refused to take serious action against click fraud, leaving its advertisers vulnerable. Click Defense withdrew as representative plaintiff in the suit in December, and Advanced Internet Technologies, a Web-hosting company, filed to take Click Defense's place as lead plaintiff.
AIT, like Click Defense, alleges that Google hasn't taken steps to reduce click fraud on its pay-per-click advertisements despite the fact that it is aware of the problem. This negligence, AIT says, has cost it hundreds of thousands of dollars. Google says it is still in the process of determining how it will handle the allegations.
