Woods v. Google, Inc.

889 F. Supp. 2d 1182, 2012 WL 3673319, 2012 U.S. Dist. LEXIS 120748
CourtDistrict Court, N.D. California
DecidedAugust 24, 2012
DocketCase No. 5:11-CV-01263 EJD
StatusPublished
Cited by3 cases

This text of 889 F. Supp. 2d 1182 (Woods v. Google, Inc.) is published on Counsel Stack Legal Research, covering District Court, N.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Woods v. Google, Inc., 889 F. Supp. 2d 1182, 2012 WL 3673319, 2012 U.S. Dist. LEXIS 120748 (N.D. Cal. 2012).

Opinion

ORDER GRANTING-IN-PART AND DENYING-IN-PART MOTION TO DISMISS FIRST AMENDED COMPLAINT (Re: Docket No. 73)

EDWARD J. DAVILA, District Judge.

Presently before the court is Defendant Google Ine.’s (“Google”) Motion to Dismiss the First Amended Complaint (“FAC”) filed by Plaintiff Rick Woods (“Woods”), on behalf of himself and all others similarly situated. See Docket No. 73. Woods filed written opposition to the motion. See Docket No. 74. The court found this matter suitable for decision without oral argument pursuant to Civil Local Rule 7-1 (b) and previously vacated the hearing date. Jurisdiction in this court arises pursuant to 28 U.S.C. § 1332(d)(2). For the reasons discussed below, Google’s motion to dismiss the FAC is DENIED IN PART and GRANTED IN PART with leave to amend.

I. FACTUAL AND PROCEDURAL BACKGROUND

A. AdWords and AdSense

Google offers two advertising products: AdWords and AdSense. FAC, Docket No. 68, ¶¶ 1, 107. AdWords allows advertisers to display advertisements on google.com and other web sites across the Internet. Id. ¶ 1. AdWords advertisers pay Google each time their ad is “clicked.” Id. Ad-Sense, by contrast, allows third parties to host or “publish” Google ads on their web sites. Id. ¶ 1 n. 1. These third parties receive a share of the revenue Google receives for each click on an AdWords advertisement that appears on their web sites. Id.

B. The Agreement

Advertisers can join the AdWords program online by clicking through and accepting the Google Inc. Advertising Program Terms (“Agreement”). Id. ¶¶ 2, 8. The Agreement states that it “constitutes the entire and exclusive agreement between the parties with respect to the subject matter” thereof, and that “[n]o statements or promises have been relied upon in entering into this Agreement except as expressly set forth” and “any conflicting or additional terms contained in any other document ... or oral discussions are void.” Id. Ex. A § 9.

According to the Agreement, “[p]rogram use is subject to all applicable Google and Partner policies” and such policies “may be modified at any time.” Id. Ex. A § 1. Under Section 2 of the Agreement, Ad-Words ads:

may be placed on (y) any content or property provided by Google (“Google Property”), and, unless Customer opts out of such placement in the manner specified by Google, (z) any other content or property provided by a third party (“Partner”) upon which Google places ads (“Partner Property”). Customer authorizes and consents to all such placements.

Id. Ex. A § 2. The Agreement also provides that “[t]o the fullest extent permitted by law, Google disclaims all guarantees regarding positioning, levels, quality, or [1188]*1188timing of’ clicks and the adjacency or placements of ads within a program. Id. Ex. A § 5.

Under the Payment Terms, the Agreement asserts “[cjharges are solely based on Google’s measurements for the applicable Program, unless otherwise agreed to in writing.” Id. Ex. A § 7. The “[cjustomer’s exclusive remedy, and Google’s exclusive liability, for suspected invalid impressions or clicks is for [cjustomer to make a claim for a refund in the form of advertising credits.” Id. Ex. A § 5. Furthermore, “[tjo the fullest extent permitted by law, [cjustomer waives all claims relating to charges (including without limitation any claim for charges based on suspected invalid clicks) unless claimed within 60 days after the charge.” Id. Ex. A § 7.

C. Smart Pricing

The AdWords help site promotes its “automatic pricing discount feature” called Smart Pricing. Id. Ex. B. Smart Pricing is “a feature that automatically reduces the price advertisers pay for clicks if [Google’s] data shows that a click from a Display Network1 page is less likely to result in a conversion.”2 Id. Smart Pricing works as follows:

For clicks arising from websites having conversion scores less than google.com, Google discounts the price of all the clicks. The total amount of the discount is equal to the price of that click multiplied by (1 minus the conversion score for the website or property originating the click). The Smart Pricing formula is expressed as follows: Smart Pricing discount = Price of Click x (1-Conversion Score)

Id. ¶ 28.

Woods alleges Google overcharged him by not applying the Smart Pricing discount formula to numerous clicks. Id. ¶ 9. Additionally, Woods believes Google deprived him of the Smart Pricing discount because it made preferential secretive deals with Special Partners. Id. Woods brings four causes of action regarding the Smart Pricing issue: (1) breach of contract; (2) breach of the implied covenant of good faith and fair dealing; (3) violation of the California Unfair Competition Law (“UCL”), Cal. Bus. & Prof.Code § 17200 et seq.; and (4) violation of the California False Advertising Law (“FAL”), Cal. Bus. & Prof.Code § 17500 et seq.

D. Non-Compliant Sites

According to the FAC, Google represents to AdWords advertisers that “all web sites and products are reviewed and monitored according to Google’s rigorous standards,” and “AdWords ads will continue to appear only on high-quality sites and products.” Id. ¶ 105. These rigorous standards include the AdSense Program Policies (“AdSense Policies”), which state how and where Google’s publishers may display AdWords ads. Id. ¶ 107. The AdSense Policies prohibit certain conduct such as the display of ads in connection with incentivized searching, tool bars, mobile applications, and clickable backgrounds. Id. Woods alleges the Agreement mandates [1189]*1189Google to enforce the AdSense Policies to its third-party publishers. Id. ¶ 106.

Moreover, Woods believes Google secretly entered into preferential agreements with its Special Partners whereby the Special Partners were exempted from compliance with the AdSense Policies. Id. ¶ 113. Woods further alleges Google exempted mobile publishers from compliance with the AdSense Policies. Id. ¶ 145. As a result of Google’s actions, “advertisers had to pay for accidental and meaningless clicks that are worth less than what Google charged for them.” Id. ¶ 114. Woods brings four causes of action regarding the non-compliant site issue: (1) breach of contract; (2) breach of the implied covenant of good faith and fair dealing; (3) violation of the UCL; and (4) violation of the FAL.

E. Location Targeting

During the sign-up and ad creation process Google provides advertisers with the option to specify the geographic locations in which they want their ads to appear. Id. ¶ 203. Specifically, advertisers are presented with the following question in the sign-up and ad creation process: “Location [help link] In what geographical location do you want your ads to appear?” Id. ¶ 204, Ex. J. The help link embedded in the foregoing question, when clicked, opens a text box stating:

“Location targeting

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Bluebook (online)
889 F. Supp. 2d 1182, 2012 WL 3673319, 2012 U.S. Dist. LEXIS 120748, Counsel Stack Legal Research, https://law.counselstack.com/opinion/woods-v-google-inc-cand-2012.