Google Must Face Claim Over Advertising Discounts

SAN JOSE, Calif. (CN) – Although most of his lawsuit was dismissed, an advertiser’s central claim against Google – that the tech giant unfairly excluded clicks on mobile devices from its discount program – was advanced by a federal judge late Thursday.

U.S. District Judge Edward Davila granted in part and denied in part Google’s motion for summary judgment on the claims of Arkansas attorney Rick Woods, who accused the company of refusing to apply a discount on advertisements he purchased.

“The court agrees with Woods that a factual dispute exists regarding the meaning of ‘mobile ads,’” Davila wrote in a terse 7-page order. “A factual dispute also exists as to whether the three clicks at issue involved mobile ads that were excluded from Smart Pricing.”

Under Google’s Smart Pricing package, customers purchase ads at a discount based on a “conversion score” of the website where the advertisement appears.

A conversion score divides the number of clicks an advertisement gets by the number of purchases made as a result of the click-throughs to give advertisers an idea of how many clicks are actually leading to business.

Woods claims he was due a discount due to the conversion score on his website, but Google refused.

Google says it didn’t apply the so-called Smart Pricing discount because the clicks originated from tablets or smartphones, which the company specifically exempts from the program.

Woods and Google disagree over the meaning of “mobile ads” and whether they actually are exempt from the tech giant’s pricing program.

While Google will have to face the breach of contract claim, it ducked three other claims when Davila dismissed them Thursday.

The judge found Woods’ breach of implied good faith covenant claim overlapped the breach of contract claim, rendering it redundant.

Second, Davila said Woods’ claim of a violation of California’s unfair competition law did not hold up because Woods failed to establish he relied on Google’s specific representations in making his purchase.

“Woods admits that he has ‘no recollection of ever being in the AdWords Help Center’ before signing up for AdWords, and so he could not have seen or relied on a misrepresentation on a Help Center webpage,” Davila wrote.

Finally, the judge dismissed another unfair competition claim involving Google’s location-targeting service. Woods said he relied on Google’s representations that the advertisements would only be displayed to people living near his law practice, when in reality several people living outside the area saw his ad.

Google said they disclose that ads may be displayed to people living outside the area, and Davila agreed.

However, Google isn’t completely off the hook regarding location targeting, because despite the disclosure the company still represented the ad would be displayed to people living in a certain geographic area.

“A reasonable jury could conclude that Woods saw and relied on Google’s statement that ads would be targeted to users in a specific geographic area; that Google in fact charged for clicks on Woods’s ads outside of the designated geographic areas; and that Woods was charged for these clicks,” Davila wrote.


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