Uber v. Fetch Media
Complaint – Advertising agency Fetch allegedly billed Uber for conversions that were actually attributable to fake clicks, false reporting, and other fraudulent activities. Uber claimed it entrusted Fetch to select ad networks and purchase legitimate mobile inventory. Uber argued that under the terms of the Agreement, Fetch was responsible for day-to-day campaign activities, including (i) oversight of ad networks, (ii) vetting publishers for quality, (iii) preventing pop-ups and auto-redirects, (iv) preventing fraud, and (v) policing the quality and accuracy of reporting data received from ad networks and verification services.
However, Uber alleged Fetch:
• allowed networks and publishers to claim credit for organic installs
• failed to report problems with the mobile inventory it purchased
• misrepresented its expertise in mobile advertising
• mislead Uber as to the extent of its fraud prevention capabilities, by offering ‘makegood’ credits to cover costs for fraudulent ads served
• billed Uber for placements it knew were nonexistent, nonviewable, and/or fraudulent
• falsified reporting to legitimize invalid/fraudulent inventory
Uber further alleged the ‘makegood’ credits were worthless, as they were simply used to purchased more invalid/fraudulent inventory.
Uber claimed that when it suspended campaigns with Fetch, there was no material drop in conversions (app installations), indicating Fetch fraudulently reported the impact of its campaigns on installs.
Finally, Uber claimed Fetch used its marketplace position to solicit improper ‘rebate’ payments from (dubious) networks and publishers, which dis-incentivized from policing fraud committed by certain entities.
UPDATE: 11Jan2018 – notice of voluntary dismissal (Doc#32). Uber voluntarily dismissed its direct claims against Fetch. Fetch claimed the dismissal was filed in an effort to escape rulings on its contract theories by Judge Rogers (Doc#33). Uber’s motion to dismiss was granted (Doc#34). Fetch’s motion to relate this case to its countersuit was denied (Doc#36).
Note that per the voluntary dismissal Uber preserved cross-claims against Fetch in Phunware v. Uber (SF Sup. Ct.; CGC-17-561546). See below.
UPDATE: 16Feb2018 – Fetch Media v. Uber (countersuit – N.D. CA; 3:18-cv-00015).
Stayed (Doc#36) – The court found Fetch’s countersuit was duplicative of an ad fraud suit in brought by Phunware in state court (SF Sup. Ct.; CGC-17-561546). In that case, Phunware alleged Uber’s withholding of payment to Fetch resulted in non-payment to Phunware. Since the question of Fetch’s contractual obligation to police ad fraud lied at the heart of both actions, the instant action presented no federal question and concerned only state contract law, and there was an interest of avoiding duplicative litigation, a stay of the federal action was granted.
If the state court does not resolve the dispute, Fetch’s claims will proceed at the federal level (the court having preemptively denied Uber’s motion to dismiss).
[N.D. CA; 3:17-cv-05393]
jbho: A new area for me, and one I plan to watch more closely. This complaint does a nice job of summarizing how advertising works, the distributed nature of the programmatic environment, the types of attribution fraud that plague the environment, and how Fetch (allegedly) failed to prevent ads from being served on fraudulent or Uber prohibited sites. Unfortunately, the complaint is heavily redacted, and all the Exhibits are under seal, so the entire picture is not quite clear.
As I’ve developed a better understanding of the programmatic ecosystem, I’m learning that not all the challenges are technical. Transparency in ad buys is a well-known problem. While advertisers expect agencies to act as fiduciaries, obligations are often limited to those dictated in agency contracts. K2 Intelligence recently published a report highlighting the challenges, and made the following recommendations:
- Establish and communicate overarching media agency management principles
- implement processes to ensure strict accountability
- track contract compliance and measure value of media delivered
- Establish primacy and know when the agency is acting in your (or its own) best interest
- take ownership and exert control over decision-making
- active stewardship over media investments
- Create a uniform code of conduct
- process for managing conflicts of interest
- build a culture of trust
- Ensure contracts include
- robust language to deliver full transparency
- robust and far-reaching audit rights
The full report is available at https://www.ana.net/transparency
Companies like pixalate publish trust indices to help you make smarter choices as well:
http://www.pixalate.com/sellertrustindex/mobile/
Pixalate also published a report in which they determined that over 1/3 of all mobile inventory was fraudulent. So be vigilant!
Finally, note that Fetch CEO James Connelly has denied the allegations, stating:
“We are shocked by Uber’s allegations which are unsubstantiated, completely without merit, and purposefully inflammatory so as to draw attention away from Uber’s unprofessional behavior and failure to pay suppliers” and “Fetch takes ad fraud extremely seriously and has been working with clients and suppliers to minimize its impact within ad networks.”
Stay Tuned…
