Monday, January 29, 2007

AdSense Participant Failed to Assert Injury from Google's Advertising

This posting was written by Bill Zale, editor of CCH Advertising Law Guide.

A business website operator, who sued Google for the allegedly false advertising of its AdSense program, failed to assert injury from Google's placement of third-party ads on the operator’s website and subsequent termination of the operator’s AdSense account, the federal district court in San Francisco ruled.

The website operator alleged that Google had sent an advertisement to her that contained a false statement—namely, that she would be able to preview the ads that Google AdSense placed on her website.

Participants in the AdSense program allowed Google to place ads from third parties on their websites after completing an application and inserting some hypertext markup code into their site, according to the court. The ads were tailored to the host website's content. Participants were able to block ads from competitors, or other ads based on their content or origin. Participants also had the option of choosing default ads to appear on their site if they did not approve of the ads that Google AdSense placed there, or if no ads relevant to the website's content were found.

Google AdSense paid participants each time an Internet user clicked on the third-party ads posted to the participants' website. To eliminate the problem of participants attempting to profit from this arrangement by clicking on the ads on their own websites, Google AdSense's contracts explicitly forbade participants from doing so, the court said.

The website operator in this case signed up to allow the AdSense program to place third-party advertisments on the website she maintained to advertise her corporate consulting business. However, Google AdSense did not provide her with any way to see which ads would be posted to her site before they appeared there.

Wanting to investigate the third-party ads placed on her website, she clicked on them. She communicated with Google AdSense staff and asked them to remove some of the ads placed on her website. The ads were not removed. Google AdSense terminated her account, removed all ads, and failed to pay her the approximately five dollars in revenue that the ads on her site had generated, according to the court.

In the false advertising claim, the website operator alleged that the method that Google provided to preview the ads did not work. The website operator alleged that she, not her customers, was deceived, the court noted. The website operator’s goodwill and relationships with her customers allegedly were damaged because of the ads that Google AdSense placed on her site.

In sum, the court noted that the website operator alleged that Google's false advertising deceived her into signing up for its services, which later caused her to lose the goodwill of her customers not because of Google's false statements, but because of the ads placed on her website and Google's subsequently closing of her Google AdSense account.

This theory of damages was too attenuated to support a false advertising claim, the court held. The website operator did not allege that she lost her customers' goodwill as a result of Google's false statements. Instead, she alleged she lost goodwill by Google's placing ads of which she did not approve on her website and then removing them. This did not support the false advertising cause of action.

Judge William Alsup’s opinion in Bradley v. Google, Inc., No. C 06-05289 WHA, U.S. District Court, Northern District of California, will be reported in CCH Advertising Law Guide.

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