Friday, August 31, 2012

Google's geotargeting claims may be actionable

Woods v. Google, Inc., 2012 WL 3673319 (N.D. Cal.)

AdWords allows advertisers to display ads on Google and other sites.  AdSense allows third parties to host/publish Google ads on their websites; the third parties receive a share of Google’s per-click revenue.  Woods argued, among other things, that Google secretly allowed certain partners to be exempt from AdSense quality policies, forcing advertisers to pay for accidental and meaningless clicks worth less than Google charged.  In addition, Google allows advertisers the option of specifiying geographic locations for their ads.  The help link for the question “In what geographical location do you want your ads to appear?” during the signup process said: “You can target your ads to almost any set of locations, including countries, territories, regions, cities and custom areas. For example, you could target specific regions within the United States and a few large English-speaking cities in Europe. You can view or edit your targeting options from the Settings tab for your campaign. Learn more about location targeting options. [hyperlink]”

Woods selected “Metro area: Ft. SmithFayetteville–Springdale–Rogers AR, US,” but discovered that Google distributed his ads to users outside this location.  He alleged that the location statements were fraudulent, in violation of California’s UCL.

The court got rid of Woods’ contract-based arguments, and the alleged UCL violations stemming from them.  Woods alleged that Google’s AdWords statements were fraudulent because they were likely to deceive advertisers into believing that Google would give them a discount for all clicks on sites that were less likely to convert than clicks from, instead of just a subset of those clicks, and that Google would apply AdSense policies to all sites.

Google argued successfully that Woods lacked standing. Under the UCL, a representative plaintiff must personally have lost money or property because of his own actual and reasonable reliance on the allegedly untrue or misleading statements. The contract itself expressly states that “[n]o statement or promises have been relied upon in entering into this Agreement except as expressly set forth herein,” and that “any conflicting or additional terms contained in any other documents ... are void.” Google maintained that, as a practicing attorney, Woods was a sophisticated party in a position to understand the no-reliance clause.

Reasonable reliance is ordinarily a question of fact, but can sometimes be resolved as a matter of law.  So here: in light of his sophistication as a lawyer, Woods could not have reasonably relied on the AdSense policies.  As for the pricing statements, reliance might have been justified because those statements were used to interpret an ambiguous clause in the contract.  But Woods didn’t allege facts showing that the pricing statements were untrue or misleading: the pricing statements said Google would give a discount on certain clicks from Display Network pages, but Display Network was specifically defined and didn’t cover Google’s entire advertising empire.  Woods failed to allege that Google failed to apply the pricing formula to Display Network pages.

The location targeting claim fared better.  Woods alleged that he expected that, by choosing his location, he’d get ads only within that location, but Google nonetheless distributed the ads and charged him for clicks outside that area.  Google argued that the complaint failed to show that it had made any representations, guarantees, or other commitments that all of Woods' ads would appear within only certain areas of Arkansas, and that other web pages disclosed the possibility of ads appearing to users elsewhere.  But Google didn’t present those web pages to the court or otherwise convince it that these statements wouldn’t mislead a reasonable consumer.  Misleadingess is, anyway, usually a question of fact.

Woods also pled injury sufficient to confer standing: Google “distributed over $20.00 of exemplary clicks that were in violation of Woods' Campaign Settings,” and he also alleged that if he’d known of the geographic scope of the ads he wouldn’t have advertised with Google.  (Wonder if that last allegation can survive summary judgment.)

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