Facebook Accused of Charging for Fake Ad Clicks

CONWAY, Ark. (CN) – A small business owner in Arkansas claims in a class action that advertisers on Facebook are routinely overcharged for fraudulent or bogus clicks generated through fake accounts.

(AP Photo/Jeff Chiu, File)

Lead plaintiff William F. Doshier and his company dotStrategy Co. sued the social media giant in Faulkner County Circuit Court on Tuesday, seeking punitive damages and restitution for its alleged failure to detect and filter invalid clicks.

Facebook, the world’s largest social media platform, said in May that it had deleted 583 million fake accounts during the first three months of 2018. That announcement tipped Doshier off to “the widespread extent that fake accounts populate the Facebook platform,” according to his 87-page complaint filed by Little Rock attorney David Hodges.

Doshier, who teaches marketing classes at the University of Central Arkansas, says Facebook should have instituted policies that detected those fake accounts – and potentially millions of others – sooner.

A doubling of Facebook’s review staff to 20,000 and artificial intelligence systems capable of filtering fake accounts could have been deployed “a long time ago…but, Facebook chose not to,” the complaint states.

According to the lawsuit, Facebook estimates that fake accounts on their social network make up about 3 to 4 percent of users, or about 66 million accounts.

“Facebook’s self-serve advertisers are not interested in increasing fake traffic from fake Facebook accounts,” the complaint states. “Facebook knew or should have known that it has overbilled and continues to overbill Doshier and class members for fake traffic that is generated from fake accounts on Facebook.”

Facebook’s press team did not immediately respond to an email seeking comment Tuesday afternoon.

The proposed class seeks compensatory and punitive damages for claims of breach of contract, fraud and deceptive trade practices for Facebook’s alleged misrepresentation of “the actual number of genuine accounts on their social network.”

Doshier wants to be reimbursed for clicks determined to be invalid, along with a court order requiring Facebook to perform an automated and manual review on all ads placed by Doshier and the class members.

The complaint estimates that 20 percent of the clicks class members were charged will be determined to be bogus clicks generated through fake accounts.

Doshier says of the 55 ads he has placed since December 2013, Facebook has provided data on only 39, limiting his ability to review his account. He asserts in his complaint that Facebook has a duty to perform manual reviews if the company is alerted to invalid click activity.

Facebook, which estimated 2.2 billion monthly active users as of March, has 30 days to respond to the lawsuit.

A federal judge in California ruled in 2012 that advertisers making similar claims cannot sue Facebook as a class. The plaintiffs in that case could not clearly show what constituted their contract with Facebook or prove they were injured.

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