• by Wendy Davis  @wendyndavis, September 1, 2020

In a defeat for Google, a federal appellate panel has reinstated a pay-per-click advertiser's claims that the company misrepresented the effectiveness of its click-fraud detection system.

The decision, issued Tuesday by a three-judge panel of the 9th Circuit Court of Appeals, allows business owner Gurminder Singh to proceed with allegations that Google violated California state laws against unfair competition -- a broad concept that includes unfair or deceptive practices -- and false advertising.

The battle dates to 2016, when Singh brought a class-action complaint against Google over alleged click fraud on its display network -- including Blogger, YouTube and other sites that show pay-per-click ads. Singh said that starting in 2016, he noticed "anomalous click patterns" that suggested fraud.

He later elaborated that he engaged an outside firm to analyze data and determine whether he was billed for invalid clicks, including clicks by bots. Singh said the firm found at least 50 “seemingly fraudulent” clicks, but couldn't determine whether he was charged for them, according to the court papers.

U.S. District Court Judge Beth Labson Freeman threw out the suit, ruling that Singh couldn't show he had been injured by the alleged click fraud.

Singh appealed to the 9th Circuit, where he argued that Google's representations induced him to use AdWords by leading him to believe the platform

Google, which opposed Singh's attempt to revive the case, denied it overstates the effectiveness of its system for filtering out invalid clicks.

The 9th Circuit appellate panel ruled Tuesday that Singh's allegations, if true, would be sufficient to show that he was injured economically.

“Singh alleges that he purchased some number of clicks from Google via its AdWords program, Google misrepresented the general efficacy of its fraudulent click filters, and he would not have purchased clicks but for his reliance on the allegedly erroneous fraud filter rate,” the judges wrote.

They added that Singh's allegations about his analysis of his charges, combined with outside studies, were “sufficient to draw the reasonable inference” that his ad campaigns “suffered higher-than-advertised rates of fraudulent clicks not caught by Google’s filters, and that he accordingly paid for more fraudulent clicks than Google advertised he would.”