Siding with Meta Platforms, a federal appellate court on Monday refused to revive a lawsuit by advertiser dotStrategy, which claimed it was charged for advertising impressions that were delivered to fake accounts.
Barring further appeals, the decision brings an end to a battle dating to 2018, when dotStrategy -- which operates the “.buzz” domain registry -- sued Facebook for allegedly misrepresenting its ad policies.
dotStrategy alleged that it paid $8,000 to advertise on Facebook between December of 2013 and May of 2018, and was charged for interactions with phony accounts during that time period.
The advertiser claimed Facebook violated a California law regarding unfair business practices, arguing that the company represented that it wouldn't charge for clicks from fake accounts.
U.S. District Court Judge William Alsup in the Northern District of California dismissed the lawsuit last year.
He said that even though dotStrategy paid for 55 Facebook campaigns, only two were purchased on a per-click or per-action basis.
There was “absolutely nothing in the record suggesting that Facebook charged plaintiff for a click by a fake account in either of these two campaigns,” Alsup wrote.
He ruled that dotStrategy couldn't proceed with claims that Facebook violated a California law regarding misleading business practices, because Facebook hadn't promised to avoid charging advertisers for impressions delivered to fake accounts.
dotStrategy appealed that ruling to the 9th Circuit, essentially arguing that Facebook's policies taken as a whole -- including its requirement that users sign up under their real names -- convey to advertisers that they will only be charged for interactions with genuine accounts.
“Is it reasonable for Facebook to say that it will not charge for invalid clicks ... but that it will charge for impressions delivered to fake accounts? Of course not,” dotStrategy argued in an appeal filed in April.
The 9th Circuit rejected that argument on Monday.
“Facebook clearly explained the differences between the charging practices to advertisers, who had the general option to choose under which system they would be billed,” the judges wrote. “A reasonable advertiser would also know that it was being charged a much higher rate for clicks than impressions.”
The judges added that Facebook “expressly disclosed that 'fake' accounts make up an estimated 5% of its monthly active users.”