Uber is suing ad networks for fraudulent advertisement
Disturbing news has been spreading online that affiliates who promoted Uber and resorted to fraudulent advertisements are under fire.
ZorbasMedia has found out that Uber, a major international transportation network, is pressing charges against five big ad tech companies that were hired by the network to promote Uber App and generate installs. We decided to carry out our own impartial investigation into lawsuits initiated by Uber to figure out what actually happened, who is to blame and what consequences these legal actions may entail.
So, let’s find out what happened.
More than 100 companies promoting Uber are alleged by the company to have committed “fraudulent concealment, negligence and unfair competition”. 5 big ad tech companies, Hydrane SAS, BidMotion, Taptica, YouAppi and AdAction Interactive and their third-party sub-publishers, are sued for suspending Uber’s millions and ruining the user’s experience of Uber App. According to Uber’s suit, the companies enriched themselves by placing ads on non-existent or blacklisted sites, misreporting statistics and using other ways of fraudulent advertising.
What is interesting, Uber hopes to find the shadow affiliates (probably individual) that could be directly responsible for ad-fraud operations. It demands the court to identify and prosecute them. Not only are they asking for restitution for damage but they also demand the companies to restrain from engaging in further acts of unfair competition.
Initially, Uber tried in vain to fight against such a big ad company as Fetch. Why did its efforts fail and will it ever find those responsible for these crimes?
Looking for the guilty
The story dates back to 2017 when Uber accused Fetch, an advertisement company it hired for promotion, of wittingly using fraudulent operations to inflate the traffic. Fetch, which subcontracts the ads to smaller companies that serve the actual creatives, claimed that both it and Uber knew about click fraud issues and committed to working it out together. Later, when the case was dropped, Fetch countersued Uber for not paying invoices…
Fetch was the first company in Uber’s justice crusade and being a big company with good lawyers and reputation it addressed responsibility to its suppliers.
Now Uber is suing five ad networks: Hydrane SAS, BidMotion, Taptica, YouAppi and AdAction Interactive. The suit says that they were paid tens of millions of dollars to place “nonexistent, nonviewable or fraudulent advertising.” Supposedly they used those kinds of fraudulent advertisement that contradicted Uber’s policy. Let’s look closer at the accusation matter. Excerpts below are from Uber’s suit to the Superior Court of the State of California.
For example, they claimed that the ad was placed on the site that actually doesn’t serve ads at all.
They also could generate clicks by using auto-redirects and pop-under traffic.
They could report clicks by just saying that they have got millions of them and the company would think that the new user was attracted by the advertisement company when, in fact, they installed the app organically. When Uber suspended advertising, the number of installations didn’t materially drop.
The suit states that supposedly YouAppi misreported the number of clicks. In its reports, all ad placement got an almost similar amount of clicks on all platforms, which is quite unrealistic statistics.
Malicious sites and stacked ads:
Are ad networks really responsible?
Let’s look at the other side of the deal. Ad networks were paid not for views or clicks but for installations. The demand for the number of new users was unrealistic and the only way to catch up with these unrealistic expectations was to turn a blind eye on some of affiliates’ rule violations. An old economics tale.
Moreover, ad networks could possibly be unaware of some of the fraudulent activity they are accused of. Definitely some of their reports seem suspicious, nevertheless, the majority of fraudulent operations could have been done by affiliates who are now unknown and are very unlikely to be found.
So, fraud? Maybe not. Certainly negligence though.
Uber asks the court to bring to justice everyone responsible for ad fraud that damaged the company’s image and suspended its budget. This includes individual affiliates that ad networks partnered with to generate traffic. However, is it possible to identify their personalities? “Uber failed to get blood out of that turnip [Fetch], so they are going after the next concentric circle of (smaller) companies that can’t defend themselves,” said independent fraud researcher Augustine Fou. “But even this will be futile, ultimately, since those ‘100 DOES’ are literally unknown entities, so they will never get their money back.”
Unique case for the industry
This case is a legal precedent when the big brand company is suing its ad networks. It is naming names and is asking to prosecute the unknown members of the fraud scheme. Although it is difficult to predict how the situation will unfold, the experts doubt that everyone guilty would be found and Uber would get the restitution it deserves. Even if the court finds no individual affiliates guilty of the ad fraud, this case signalizes a growing amount of attention that companies are paying to its advertisement on the Internet. Whatever the case, we’ll keep you up to date.
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