Google Being Sued for Non-PaymentWritten by Michael Levanduski
October 1, 2013 # 10:29 pm # Industry News, Legal Challenges, Specials # 2 Comments
ActiveCast Media has filed a lawsuit against Google in US court last week. They are suing Google for a breach of contract. The claim says that Google is unlawfully withholding payments for traffic that ActiveCast sent to Google advertisers according to their contract agreement with Google DoubleClick AdExchange. The online advertising world can be quite complex and confusing, however, which is likely the cause of any confusion which is resulting in the lawsuit.
Google flagged the account of ActiveCast for invalid activity. When they flagged the account, they also retroactively put a hold on the payments owed to the company. These payments totaled just over $1 million. ActiveCast claims that the traffic was not invalid, and that their publisher clients had purchased it from sources such as Fox News, CNN and others.
The total suit is for over $1.3 Million for breach of contract, and loss of expected revenue.
One big hurdle ActiveCast has to overcome in this suit is that Google holds all the data for this type of case. Since they are the one who decides which types of clicks and traffic are valid, it may be difficult to prove them wrong in court. ActiveCast will attempt to show that Google intentionally (and illegally) deemed the traffic to be invalid just to try to reduce their traffic acquisition costs.
This lack of transparency is an issue throughout much of the online advertising industry. Until Google, Facebook and other major ad networks become more transparent, these types of issues will continue to come up. It also makes it possible for more devious and intentional fraud, such as bot nets and adware to successfully defraud marketers out of billions in ad dollars every year.
What do you think about this lawsuite? Does ActiveCast have a chance here, or will Google just steamroll over them with a team of attorneys and hidden data?