Yahoo Settlement Payouts In OMS Case Begin

Yahoo is distributing payments in the Online Merchant Systems class action settlement over alleged flaws in its bidding system.

The case was settled I believe in 2006 (the settlement agreement, PDF format, is undated). A final judgment was entered in April of this year, with notification to happen by June 9, according to the class action’s web site:

On April 25, 2007, the Court entered the Final Judgment and Order of Dismissal with Prejudice in the Online Merchant Systems v. Yahoo! action. Notification related to processed claims will be distributed via e-mail on or before June 9, 2007, to claimants who submitted a claim form for this Settlement.

Frank Watson over at Search Engine Watch reported this week on being one of the people receiving refunds. As for the case itself, the key issue according to the case notice (PDF) was this:

The Action alleges that when the System’s budgeting feature was used, certain advertisers would be removed from search results when their daily budgets had been fully exhausted, but their bids would remain visible for other bidders to see in a manner that did not indicate that Event Date.

A previous version said the payments were related to the Yahoo settlement of a click fraud class action case. That’s an entirely different case, and payments are not being sent out in it yet. Most comments below relate to that earlier version.

Related Topics: Channel: SEM | Yahoo: Legal | Yahoo: Search Ads


About The Author: is Search Engine Land's News Editor and owns RustyBrick, a NY based web consulting firm. He also runs Search Engine Roundtable, a popular search blog on very advanced SEM topics. Barry's personal blog is named Cartoon Barry and he can be followed on Twitter here. For more background information on Barry, see his full bio over here.

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  • Lori Weiman

    This is fantastic news for those advertisers who filed a timely claim. To have been eligible for the monetary reward provided for in Yahoo settlement, advertisers needed to have taken the following steps:

    (1) Completed the Assertion of Rights claim form by November 20, 2006
    (2) After that date, you would have received a Claim Form in the mail. Which had to be completed in order to receive compensation.
    (3) Your submitted Claim Form will then have gone to Yahoo for review and decision on whether your campaigns were victims of click fraud. If the Yahoo determines ‘Yes’, then a refund check should be arriving shortly. If Yahoo determines ‘No’, then you are not eligbile for a refund.

    The other alternative was to opt-out of the settlement and bring a case against Yahoo on your own. To take that road, you had to have directly opted out by filing yet a different form by October 14, 2006.
    (this information with instructions can be found at )

    Seems like alot of work, for little chance of payout. However, when you compare it to your settlement value from the Google class action claim, Yahoo will make a tycoon out of you. In the Google class action settlement, you’d be lucky to receive $3.50 for every $1,000 in claimed click fraud. Whereas, in the Yahoo settlement, you will get 100% of your money back for click fraud.

    The bottom line: both settlements are unfair to the advertiser. Neither provides a fair and balanced method of evaluating questionably billed clicks. A more equitable solution would have been to assign a third party auditor with the task of evaluating claims, with the promise to recieve 100% money back for improperly billed clicks. Instead, advertisers are still being burdened with the complete job of auditing their own campaigns, without the power to do anything about their findings.

    What happened to customer rights?

    Good Luck.

  • AussieWebmaster

    Actually I ended up editing the article very soon after posting it.

    I took it to be the click fraud claim being settled and it turned out it was the one for the errors with the Overture bidding tool and its budgeting tool. Both were found to have been problematic during the period October 1, 2004 to June 1, 2005.

    The Click Fraud claim will be another round of checks Overture users who filed should see some time this year.

  • rustybrick

    That is weird Frank…

  • Boris Mordkovich


    I wonder how many people opted out of the settlement to bring it against Yahoo on their own?

    Doesn’t really seem like a viable option for the average advertiser. Too much hassle and headache for an unclear result.


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