Tuesday, 1 November 2016

The nasty 'click fraud' legal dispute between ad tech companies Criteo and SteelHouse is over (CRTO)

mark douglas

Rival ad tech companies Criteo and SteelHouse have agreed to drop their respective lawsuits and countersuits against each other, which both alleged the other was using dubious methods to artificially drive up their click rates.

The dispute began when Criteo filed a lawsuit against SteelHouse in June. Criteo published a joint press release from both companies on its website on Tuesday morning, confirming the legal battle was over.

The statement reads:

"Criteo (NASDAQ: CRTO) and SteelHouse have dismissed their respective claims, ending the lawsuit filed in the U.S. District Court for the Central District of California entitled Criteo S.A. v. Steel House, Inc., Case No. 2:16-cv-4207-SVW-MRW.

Criteo and SteelHouse provide different business solutions, based on distinct attribution and pricing methodologies, to their clients. Through the legal process, both companies, as well as the online marketing industry, have gained greater clarity about the companies’ respective solutions.

Criteo and SteelHouse agree that the focus should be on continuing to improve transparency in the ad tech industry."

Neither company could comment on the details of the settlement, as per their legal agreement.

The announcement that the two have reached a settlement outside court comes just under a week after a California judge denied Criteo's request for an injunction to be served against SteelHouse to prevent it from running an alleged "counterfeit click fraud scheme."

The court found the lawsuit raised "serious questions" about SteelHouse's conduct but that Criteo had not proved that "irreparable and immediate harm" would be likely if an injunction was not served.

The choice to drop the legal action ends a dramatic back-and-forth between the pair:

  • June: Criteo alleged it had lost business because SteelHouse used a "counterfeit click fraud" method to falsely take credit for user visits to retailers' web pages. Many retailers measure the performance of their ad tech vendors by using a method called "last click attribution," which gives credit to whichever computer served the last ad a user clicked on before landing on their websites.
  • July: SteelHouse filed counterclaims alleging Criteo "regularly injects adware" into users' personal computers and puts inventory from "non-reputable sources" to drive up its click numbers.
  • August: Criteo persuaded five former SteelHouse clients to sign declarations supporting its allegations.
  • September: SteelHouse filed further counterclaims, alleging an analysis of Criteo's web logs showed behavior "indicative of adware, bots, click farms, or other code" intended to artificially inflate its click-count numbers.
  • October: A California judge denies Criteo's request to have an injunction served against SteelHouse.

Criteo, the most successful pureplay ad tech company trading on the public markets, is due to announce its third-quarter earnings on November 2. Criteo's stock is currently trading at $36.15, lower than the $43.02 price it was trading at the day the lawsuit was filed.  

SEE ALSO: Judge denies Criteo's request to serve injunction against competitor it claimed was running a 'counterfeit click fraud scheme'

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