Siding with Facebook, a federal judge has thrown out a lawsuit by the Arkansas marketing company dotStrategy, which alleged that it was charged for clicks originating from “fake”
accounts.
The ruling, issued Friday by U.S. District Court Judge William Alsup in the Northern District of California, is “without prejudice” -- meaning that dotStrategy can beef
up its complaint and bring it again.
dotStrategy, which operates the “.buzz” domain registry, alleged in a class-action complaint that it was charged for clicks from 13 fake
accounts between 2013 and 2018.
The company said Facebook ultimately deleted eight of those accounts, but failed to issue a refund.
dotStrategy claimed that Facebook violated a
California business law regarding unlawful, unfair or fraudulent conduct. The claim centered on allegations that Facebook represented to advertisers that they wouldn't be charged for invalid
clicks.
Facebook urged Alsup to dismiss the case for several reasons, including that dotStrategy didn't spell out in its complaint whether it relied on any particular promises by Facebook.
Alsup agreed with Facebook on that point.
“The main statement that plaintiff complains of ... concerns Facebook’s alleged statement to advertisers that they would 'not be
charged for clicks that are determined to be invalid,'” Alsup wrote in an opinion issued Friday. “Crucially, the complaint fails to allege that plaintiff relied on this alleged
misrepresentation, which is the crux of plaintiff’s entire case, as presented during oral argument. This shortfall in pleading is fatal.”
Facebook had also argued that its contract
with advertisers required them to notify the company of disputes within 30 days. The social media company said dotStrategy failed to meet that 30-day deadline.
But Alsup said in his ruling
that the 30-day deadline was unreasonable and therefore unenforceable.
“In short, allowing plaintiff only thirty days to thoroughly investigate every single Facebook account that clicked
its ads was unreasonable — though perhaps, as Facebook contends, remotely possible,” he wrote. “Accordingly, under the circumstances alleged here, this order finds that
Facebook’s waiver provision is unenforceable.”
Alsup gave dotStrategy until September 11 to amend its allegations.
A different federal judge recently allowed dotStrategy to
pursue similar claims against Twitter.