Friday, April 26, 2019

advertisers' claim against Google for insufficient credits for bad clicks continues

Adtrader, Inc. v. Google LLC, 2019 WL 1767206, No. 17-cv-07082-BLF (N.D. Cal. Apr. 22, 2019)

Advertisers buy ad space on Google’s AdX, while website publishers (or network partner managers (NPMs) who act for them) use AdX to sell ad space on their websites.  Plaintiff AdTrader is an ad network on the buyer side and an NPM on the seller side.  In 2017, a few days before Google was due to pay AdTrader its accrued AdX earnings, Google told AdTrader it was terminating AdTrader’s AdX account ue to violation of Google’s policies. Google didn’t terminat the individual accounts of AdTrader’s publisher clients, and AdTrader alleged that Google contacted one of AdTrader’s publisher clients “to begin a direct relationship.” At the time of termination, AdTrader had a balance of nearly $480,000 in its AdX account, which Google withheld.

AdTrader alleged that Google improperly withheld ad revenue from it, and, on behalf of a putative advertiser class, alleged that Google didn’t properly refund or credit advertisers for payments made for clicks or impressions that Google subsequently, after invoicing the advertisers, determined were invalid. Aspects of the breach of contract claim based on Google’s agreements with advertisers survived the motion to dismiss.

California UCL/FAL: Google allegedly “made and broadly disseminated over the Internet [numerous] untrue or misleading statements” concerning purported refunds or credits for invalid activity discovered by Google. “Google’s actions and systematic conduct towards Plaintiffs” in “refus[ing] to provide credits or refunds to advertisers for invalid impressions or clicks on their ads” were the basis for the UCL claim.

Google argued that plaintiffs lacked standing because they were “corporate customers.” But the UCL and FAL apply to any “person who has suffered injury in fact and has lost money or property as a result” of the alleged wrongful conduct. And “person” includes “corporations.” However, the California Court of Appeal has held that, “where a UCL action is based on contracts not involving either the public in general or individual consumers who are parties to the contract, a corporate plaintiff may not rely on the UCL for the relief it seeks.” But this rule only precludes “sophisticated corporations” or “large corporations” from seeking such relief.  

The complaint sufficiently alleged that plaintiffs are small, unsophisticated businesses each employing between 3 and 25 people and that “the vast majority of AdWords advertisers are small businesses” and that “millions of the participants in AdX are small businesses.” “Moreover, the relative level of sophistication may be a question of fact.” [Query what effect these allegations have on class definition/administrability.]

Further, plaintiffs adequately alleged that they relied on Google’s public statements to “expend[ ] money to purchase advertising through AdX and DBM that they would not have otherwise spent.” For example, they alleged reliance on Google’s allegedly misleading statement that “[w]hen invalid activity is found through offline analysis and reactive investigation, we mark those clicks as invalid and issue credits to any advertisers affected by this activity” in deciding to enter the agreements.

No comments: