Senators Ask FTC for Answers on Ad-Click Fraud

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Internet ads are hard to escape. But who's actually clicking on them? Far too many bots, according to two Democratic senators.

Sens. Mark Warner of Virginia and Chuck Schumer of New York today penned a letter to Federal Trade Commission Chair Edith Ramirez asking that the agency provide them with details on what it's doing to crack down on ad-click fraud.

"These programs allow hackers to seize control of multiple computers remotely, providing them access to personal information as well as the ability to remotely install malware to engage in advertising fraud, entirely unbeknownst to the computer's true owner," Schumer and Warner wrote.

Internet advertising revenues in 2015 were estimated at $59.6 billion. But many of the purchased ads are not reaching their intended audience, the lawmakers argued. Instead, they are being intercepted by botnets.

From basic bots that copy clicks to "humanoid" bots that mimic mouse movements with uncanny precision, these systems are often advanced enough to analyze consumer activity and target ads based on individual browsing preferences.

"Bots plague the digital advertising space by creating fake consumer traffic, artificially driving up the cost of advertising in the same way human fraudsters can manipulate the price of a stock by creating artificial trading volume," the letter said.

This market manipulation scheme already accounts for 30 percent of annual digital advertising revenue, and is expected to cost advertisers more than $7 billion in the next year.

"The cost of pervasive fraud in the digital advertising space will ultimately be paid by the American consumer in the form of higher prices for goods and services," Warner and Schumer told Ramirez.

Last month, the World Federation of Advertisers reported that by 2025, fake Internet traffic schemes will be second only to the cocaine and opiate markets as a form of organized crime.

The senators asked the FTC to respond to six specific questions regarding ad-click fraud, including what the agency knows about the phenomenon and what it's doing to protect consumers.

The FTC confirmed to PCMag that it received the letter, but declined to comment further.

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