Is search arbitrage the same as ad fraud?
No. Search arbitrage sends real people to real ads under a contract, and the advertiser pays only if a person chooses to click. Ad fraud fakes the people or the clicks. The two overlap when an arbitrage operator, or a traffic seller it buys from, uses bots, click farms or deceptive tricks to inflate clicks.
The distinction is whether a human with genuine interest made the click. Search arbitrage passes that test when done properly. Click fraud fails it by definition, whether through bot traffic, a click farm, incentivised clicks or Self-clicking.
The grey area is traffic that is human but worthless: accidental clicks from confusing layouts, or visitors who were misled. Measurement bodies class much of this as invalid traffic even though no bot was involved. Search engines handle it commercially, by discounting or refusing to pay, without needing to prove intent.