• by Wendy Davis , Staff Writer @wendyndavis, June 29, 2006

Yahoo has agreed to settle a class-action click fraud lawsuit by offering credit or cash refunds to advertisers for claims dating back to January 2004, and about $5 million in attorneys' fees.

The lawsuit, brought in June 2005 by Delray Beach, Fla.-based CheckMate Strategic Group Inc., alleged that Yahoo didn't adequately police clicks on search ads. Los Angeles U.S. District Judge Christina Snyder gave preliminary approval to the settlement.

The Yahoo prospective settlement doesn't cap the total amount Yahoo will pay in refunds or credits--unlike a proposed settlement in a class-action case against Google. The Google settlement, if approved, would limit credits and attorneys' fees to a total of $90 million.

The Yahoo proposal also includes additional forward-looking features absent from Google's prospective settlement. For instance, Yahoo said it would appoint a "traffic quality advocate" to address concerns about click fraud. Yahoo also said it would work with a "reputable third party" to develop an industry-wide approach to fighting click fraud. Yahoo also promised to "commit technical and human resources to build a Traffic Quality Resource Center, which will provide advertisers with more detailed information about traffic quality issues (including click fraud) and solutions."