Uber Sues Dentsu's Fetch Media for Fraud

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Credit: From Uber's app

Uber Technologies Inc. is accustomed to getting sued. Now it's doing the suing.

The global ride-hailing company is taking advertising agency Fetch Media Ltd. to court for click fraud, alleging that the firm improperly billed Uber for "fake" online ads and took credit for app downloads it had nothing to do with. Fetch is owned by the world's fourth-largest advertising company, Japan's Dentsu Inc.

Uber filed the lawsuit Monday afternoon in U.S. District Court in San Francisco. The next day, Fetch's founder and CEO, James Connelly, said in an emailed statement that the agency was "shocked by Uber's allegations, which are unsubstantiated, completely without merit, and purposefully inflammatory so as to draw attention away from Uber's unprofessional behaviour and failure to pay suppliers."

Going on the offensive in court is a rare move for Uber. The company is a plaintiff in only two federal cases, according to data compiled by Bloomberg. Meanwhile, it has been a named defendant in about 250 federal cases. The data aren't comprehensive but show Uber is usually on the defensive.

As part of the lawsuit, Uber plans to seek at least $40 million in damages, according to people familiar with the matter, who asked not to be identified disclosing legal plans.

Online advertising fraud has grown more sophisticated in recent years along with the amount spent on such ads. Fetch has acknowledged the challenge publicly and has said it was working with research firm Forensiq to fight against mobile ad fraud.

The Fetch CEO's statement said the agency "takes ad fraud extremely seriously" and said it was "unfortunate that Uber would misconstrue facts and use an industry-wide issue as a means of avoiding its contractual obligations." He said Fetch ended its agreement with Uber months ago, "after Uber stopped paying invoices for services provided by over fifty small business suppliers, engaged by Fetch to place Uber's mobile advertising."

Uber said it discovered something was amiss when it canceled a campaign on the conservative website Breitbart, where Fetch was placing Uber ads. The company asked Fetch not to post advertisements on the site, but it saw ads appearing there anyway.

Fetch pulled ads from all networks that had a relationship with Breitbart, but the move had little effect on the number of people downloading the app, contrary to Fetch's claims, the complaint said. Uber pays Fetch and other ad networks a fee when a potential customer downloads its app after seeing an ad. Uber alleged that after further inspection, Fetch had a widespread practice of over-billing. Uber claims that Fetch had been attempting to claim credit for app downloads it didn't generate.

"With Fetch, we learned the age-old lesson 'buyer beware' the hard way," the company said in an emailed statement. "Fetch was running a wild west of online advertising fraud."

From 2015 to early 2017, Uber paid more than $82.5 million for advertisements overseen by Fetch, according to the complaint. Uber has refused to pay more than $7 million that Fetch has said it owes. Fetch's publicly traded parent company Dentsu, which has a $12 billion market capitalization, is not named in the lawsuit.

--Bloomberg News, with Ad Age staff

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