With attention grabbing figures like “$25 billion lost to click fraud each year”, clearly click fraud is an illegal practice . In fact, the facts around whether click fraud is illegal are a little murky.
Yes, there have been arrests and court cases around the defrauding of online advertisers. And, yes the PPC platforms are doing their best to close those loopholes that continue to allow PPC fraud to proliferate. But, is click fraud actually illegal?
Ad fraud vs click fraud
Despite ad fraud and click fraud being part of the same family, they’re actually not mutually interchangeable. It helps to understand what these terms mean and how they relate to you the advertiser.
Click fraud is any form of ‘invalid click’ (as the PPC platforms refer to these clicks) which has a malicious intention. This can be from your rivals who are looking to deplete your advertising budget. Or it might be an automated traffic source clicking on your paid links.
Competitor click fraud is probably one of the best examples of click fraud and might be one example of where you might be considering pressing charges.
Ad fraud tends to be run by more sophisticated operations, running click fraud processes on a wholesale scale. This tends to include running huge ad clicker botnets, spreading malware and using complex programming software to spoof websites to divert your marketing budget to their own pocket.
Invalid traffic is what the PPC ad platforms refer to when talking about any non-genuine click on your paid ads. This includes everything from organised fraud down to genuine accidents such as a slip of the finger.
The legal side
As mentioned, the laws around the legality of click fraud (or otherwise) are a little murky. Generally, although most countries don’t have specific laws against click fraud, they do tend to have laws that cover cybersecurity or ‘information technology’.
In conjunction with existing fraud laws, most court cases against click fraud focus on aspects such as wire fraud, data theft, deception and money laundering.
China, for example, has the Anti-Unfair Competition Law which is supposed to tackle issues such as stealing trade secrets and bribery. However, the wording of the ‘unfair advantage’ can also include fake clicks on paid ads, i.e; click fraud or ad fraud.
The European Union is one of the planet’s most progressive territories when it comes to digital rights. The GDPR was one of the first pieces of legislation to give internet users rights over their data. So surely click fraud and ad fraud will have some laws against it here?
In fact, the European Union does have some of the strictest anti-fraud laws in the world. At a federal level, there is solid anti fraud protection from OLAF, the anti fraud office.
However, individual states also do make some aspects of click fraud illegal.
German Cybersecurity laws do cover owning or operating software with the intention of committing ‘computer fraud’. This covers a broad area such as hacking, phishing and data theft. There is no specific law against click fraud, but German fraud laws could be applied with their cybersecurity legislation.
In India, the Information Technology Act 2000 (IT act) does cover a lot of the facets of click fraud. However, the most relevant law would be the Indian Penal Code (Section 420) which covers most practices related to fraud. There is no specific law against click fraud or ad fraud.
The US has some of the strictest anti-click fraud laws. The Computer Fraud and Abuse was set up to cover mostly national security and personal data, but has been amended numerous times. Almost all successful click fraud lawsuits have been prosecuted on US soil.
Depending where you are, click fraud may not be illegal in and of itself. But you can likely find a way to prosecute if you can get the proof.
Is click fraud costing you a precious advertising budget?
In this video, I talk about how do Google ads deal with click fraud and invalid clicks?
