Microsoft has decided to sue three Vancouver family members for allegedly launching a massive "click fraud" scheme to damage their competitors on World of Warcraft related sites and auto-insurance sites. They are supposed to have used a program that depleted their competitors' budgets on Microsoft's adCenter campaigns, thus boost traffic to this family's World of Warcraft and auto-insurance Web sites.
In a lawsuit filed Monday in U.S. District Court in Seattle, Microsoft names Super Continental US LLC and UMGE LLC and their owners Eric Lam, brother Gordon Lam and mother Melanie Suen (plus an unknown number of "John Does"), as responsible to the alleged fraud.
Super Continental sells virtual "gold" for the popular computer game World of Warcraft (which values real-world money), and UMGE offers auto-insurance quotes.
Microsoft argues that the defendants cost at least $750,000 and violated the terms of use for the adCenter. The company has credited nearly $1.5 million to advertisers who were affected by the alleged fraud.
The first click fraud was notices by Microsoft on March 24, 2008. A high number of complaints from auto-insurance advertisers said there was a spike in exact-match searches for "auto insurance", "car insurance", "cheap car insurance", "auto insurance quote" and "auto insurance quotes".
"Such a spike for exact match-type keywords is extremely unusual," the lawsuit states. "It is as if one hundred people in a room were asked to type the first three words that came to mind, and all one hundred typed the same three words at the same time, with no communication and no visual cues among them".
Similar search spikes for keywords related to World of Warcraft gold was noticed at the same time.
Several events of spikes occurred since then, but the Canadian defendants managed to avoid Microsoft's catch. The events occurred on April, June and July 2008, and then in December the same year.
After doing a long-term investigation, Microsoft ha determined the fraud came from names Super Continental US LLC and UMGE LLC, that used "proxy server networks" to hide themselves.
"Super Continental US holds itself out as responsible for the sales and marketing of WoWMine.com, a Web site related to WoW with a domain name that is registered to Lam," the lawsuit states. "At the same time, the Super Continental US LLC (USA) account on adCenter also contains campaigns related to the auto insurance (keywords)."
Microsoft identified seven adCenter accounts tied to Lam, and on each the credit-card holder was either Lam or Suen. Five of the seven accounts were registered under the same apparent pseudonym - Vincent Chu - and six of the accounts were registered to the same physical address in Delaware as Super Continental and UMGE.
"Apparently to divert suspicion from his own activities as the source of the fraudulent activity, Lam himself complained to Microsoft about the incidence of click fraud on the Microsoft Network, and, he too was issued a small credit by Microsoft before Microsoft knew Lam himself was behind the click fraud scheme," the lawsuit said.
By using the program, the defendants were allegedly able to deplete the advertising budgets of their competitors and move them off of the Microsoft Live Search sponsored results, thus attracting much traffic to their own companies.
