Uber Being Sued For Unpaid Ads It Says Were Fraudulent

A Britain-based mobile advertising agency sued Uber Technologies trying to force the U.S.-based ride-hailing company to pay millions of dollars in advertising that Uber has refused to pay claiming the ads were fraudulent.

Earlier this week, Fetch Media filed the lawsuit in the same federal court in California where Uber sued Fetch this past September, accusing the ad agency of billing for fraudulent or non-existent non-viewable ads, and not passing back commissions and rebates.

Uber dismissed the lawsuit voluntarily December 22, just two weeks after it has been reassigned to another judge, and said it was instead going to pursue claims in a state court in San Francisco.

Ad fraud, referred to at times as click fraud, is a common issue with online advertising, as it occurs when automated programs mimic the legitimate user through clicking ads.

London-based Fetch is a unit of Denstu, Inc. based in Japan. It suggested Uber dismissed the federal case due to concerns it might lose when the case was given to another judge, who has ruled on other litigation involving Uber.

In the lawsuit filed on Tuesday, Fetch asked that the same judge be assigned to determine the contractual responsibilities of both companies, and direct the ride-hailing company to pay over $19.7 million in invoices that were owed from 2017.

The company added that it does not believe Uber can avoid scrutiny of the federal court for its incorrect theories on contracts so easily.

The Association of National Advertisers, which is a trade group, in May of last year, estimated marketers would lose as much as $6.5 billion during 2017 due to fake web traffic that bots cause.

Uber announced in September of last year that it hired Fetch for ad placement that encouraged new riders to download the ride-hailing company’s app, and would pay legitimate clicks that were designed to attract the new riders.

However, it said that Fetch wrongly claimed the credit for downloads of apps that took place without ads being clicked. Uber said Fetch was paid over $82.5 million, but that the failure of Fetch to stop the fraudulent ads contributed to as much as $50 million of the damages.

Uber says the alleged fraud came to light during the early months of 2017 as clients started to complain about where ads were appearing.

In one instance, Uber said it requested Fetch not advertise on Breitbart.com, the conservative news website, but ads appeared there nonetheless.

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