Google has launched a legal battle against a company, alleging that it has been "fraudulently generating ad clicks" in an attempt to deprive the internet advertising company of millions of dollars in revenue.

In a case brought in the Superior Court in Santa Clara, California, Google alleges that a Texas-based internet company, Auction Experts International, and its founders Sergio Morfin and Alexei Leonov, clicked on adverts carried on its AdSense programme, causing Google to pay them for "traffic" to its advertisers.

Google filed its papers on November 15, with a case management hearing due next March. As yet, Auction Experts and Messrs Morfin and Leonov have not filed any defence documents nor commented on the proceeedings.

Google's Adsense programme offers targeted advertising for websites. Google's clients can add a Google search box to their site and show targeted adverts on search results pages. Google's case alleges that Mr Morfin and Mr Leonov paid up to 50 people to click on online adverts to receive fees from Adsense.

"Defendants ... flagrantly abused [Adsense] by artificially and/or fraudulently generating ad clicks," Google claims in its legal papers. "These clicks were worthless to advertisers, but generated significant and unjust revenue for defendants."

Bogus clicks have been a worry for companies such as Google. It is not the first time that Adsense has made headlines. In March this year, a man was arrested for allegedly attempting to blackmail Google over the service. The programmer was convicted for demanding $150,000 in return for shelving software that he had developed to defraud Adsense by generating bogus clicks.

The paid search advertising market is estimated to be worth $5 billion a year and is the fastest growing type of online advertising. Through its court case, Google is seeking compensation and punitive damages, a return of the money paid to Auction Experts through AdSense, and court costs.

Click fraud is a potentially huge problem for the paid search advertising market. It has been estimated that as much as 20 per cent of total sales and as much as 50 per cent in some categories have been lost to fraudsters who often use programmes called "robots" or "bots" to produce millions of worthless clicks. There have even been reports of firms employing cheap labour in countries such as China and India to click on ads, and of companies ordering their employees to click on rival adverts to derail their marketing budgets.

"Click fraud is as old as online advertising business itself," said Dmitri Eroshenko, the chief executive of Clicklab, the web analytics company that has produced a white paper on click fraud.

"It is probably the most ignored, yet potentially most expensive and damaging aspect of pay per click advertising that advertisers need to be very familiar with," the company's white paper concluded.

Clicklab argues that a lack of communication between search networks, advertisers and vendors has contributed to the problem and that its full scale has not yet been grasped by the industry.

Times Recommends

• C&G axed - 1,660 jobs to be lost
• UK house prices rise 1.1% as buyers return
• Mixed reaction to US banks repaying bailouts