Facebook Must Face Lawsuit Over Ad Clicks From Fake Accounts

Siding against Facebook, a federal judge has ruled that the Arkansas company dotStrategy can proceed with a class-action complaint alleging that Facebook charged marketers for clicks originating from “fake” accounts.

The order, issued Wednesday, stems from a lawsuit first brought in 2018 by dotStrategy, which operates the “.buzz” domain registry. The company alleged it was charged by Facebook for clicks from 13 fake accounts between 2013 and 2018.

dotStrategy said Facebook ultimately deleted eight of those accounts, but failed to issue a refund.

In its complaint, dotStrategy claimed 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.



U.S. District Court Judge William Alsup in the Northern District of California dismissed that complaint in September, ruling that dotStrategy didn't spell out how it had relied on Facebook's alleged misrepresentations.

Alsup's dismissal order was without prejudice, meaning that dotStrategy could add new allegations and bring the complaint again.

The company subsequently proposed an amended complaint that included claims that dotStrategy “paid for ads for which it would not have agreed to pay anything at all had it known the truth about Facebook's misconduct.”

One Facebook statement dotStrategy allegedly relied on reads: “On Facebook, you'll only pay to reach the right people who'll love your business.”

Another provides: “Facebook is a community where everyone uses the name they go by in everyday life. This makes it so that you always know who you're connecting with.”

Facebook urged Alsup to prohibit dotStrategy from filing the amended complaint, arguing that the company “still fails to explain how reasonable advertisers could be deceived by Facebook’s alleged statements.”

Alsup rejected Facebook's arguments, and ruled that dotStrategy could proceed with its amended claims.

“Taking plaintiff's allegations as true, it has alleged sufficient facts explaining how a reasonable advertiser could, at the very least, be misled by Facebook's statements,” the judge wrote.

Next story loading loading..