Patent attorney firm referred to prosecution over click fraud

[Anchor]

A patent attorney firm has been referred to the prosecution on charges of causing a competitor to incur hundreds of millions of won in advertising costs.

They are accused of having job seekers click on the competitor's ads.

Reporter Kim Tae-hoon has the story.

[Report]

In Nov. 2019, patent attorney Lee commissioned search ads on Naver.

He signed a contract for 'Powerlink' ads that would display his firm first when searching for terms like 'trademark registration.'

The condition was to pay about 50,000 won for each click on the website.

The average number of clicks per month was over a thousand, and over 1 year and 4 months, he paid 550 million won in advertising costs, but he claims he suffered huge losses as it did not lead to actual consultations or sales.

[Lee ○○/Representative of the victimized firm/voice altered: "We raised suspicions several times with Naver that we suspected these were fraudulent clicks. We had internal programmers and took all measures to technically block fraudulent clicks, but it still wasn't caught."]

The police investigation revealed that a competing patent attorney firm induced 'clicks' to harm Lee.

They set up a ghost company, claimed to be hiring website developers, and told those who contacted them to search for 'trademark registration' and check out the website design of Lee's firm.

It is estimated that around 10,000 job seekers were mobilized for clicks without knowing what was happening.

The police have referred the representative of the competing firm to the prosecution on charges of obstruction of business.

In July, a complaint was filed stating that there were over 4,000 fraudulent clicks in a month, resulting in damages of over 260 million won, and an investigation is ongoing.

Naver has stated that they have opened channels for pre-filtering, post-verification, and re-examination requests, and that they will refund advertising costs if fraudulent clicks are confirmed, but similar damages continue to occur.

[Ko Dong-jin/Member of the National Assembly's Industry, Trade, and Energy Committee/People Power Party: "This advertising cost structure encourages bleeding competition among small businesses and causes conflicts, while only enriching the platform companies..."]

There are calls for detailed measures to prevent increasingly sophisticated new methods.

KBS News, Kim Tae-hoon.