SAN JOSE – A federal judge sided with Google in an online advertising contract dispute.
Three website publishers — eOnline Global, Sonoran Online Marking and Four Peaks Online Marketing — filed a breach of contract lawsuit against Google, accusing it of improperly terminating their advertising accounts and withholding $400,000. Google moved for summary judgment and the publishers did the same in a cross motion. In an opinion issued May 15, Judge Edward Davila granted Google’s request.
According to Davila’s opinion, the dispute centers around Google’s AdSense program through which Google provides code to web publishers. Google’s algorithms determine which ads to feature on which websites via the code. For the companies in question, each time a website visitor clicked on an ad, Google charged the advertiser and gave 68 percent of that fee to the publisher, issuing payments at the end of any month when the publisher earned a balance.
Mark Ashworth and Travis Newman founded and operate all three publishers. According to Davila, they structured the companies in this fashion “following advice from a Google employee’s online forum posting” so they could exceed the limits of 500 URLs applied to each AdSense account.
Though the publishers were enrolled in AdSense in 2008, 2010 and 2015, Google didn’t send notice of terms of service violations until early 2016. Davila said Google sent more than a dozen warnings before disabling the accounts on July 12, 2016. Google took the $404,433 in unpaid balance and credited that, plus its own share and an additional $221,000, to the advertisers charged to run ads on the publishers’ sites.
Davila said Google’s strongest argument in favor of summary judgment was a contention the publishers can’t provide evidence they held up their end of the AdSense contract. He noted Ashworth and Newman “make no attempt to present their own evidence that would create a genuine dispute of material fact as to that element, and their arguments — to the extent their briefing even addresses their performance — are not persuasive.”
Google argued the publishers created sites specifically for the purpose of displaying clickable advertising.
“Ashworth testified that Plaintiffs would select the subject matter of their webpages by ‘looking at the verticals and figuring out which we felt would make the most money,’” Davila wrote. “Their two biggest factors for choosing the website subject matters were the level of expected visitor traffic and expected amount they would make per ad-click.”
Further testimony detailed a plan to use keyword phrases that drew high-paying advertisements, using those phrases to title articles that hadn’t yet been written. Davila said they “sometimes produced up to 100 titles for yet-to-be-written articles based on a single keyword phrase,” then provided those titles to a vendor, Textbroker, to provide the actual article text with instructions to use each phrase at least three times.
“Plaintiffs made essentially no effort to ensure their websites offered content of substance or value,” Davila wrote. A writing manager “would skim the articles to make sure that followed ‘English 101,’ but she did not review for them for quality or accuracy.”
Davila said the publishers didn’t argue they ran legitimate websites, only that the unpaid funds were withheld without justification.
Ultimately finding the publishers didn’t fulfill their contractual obligations, Davila said Google is entitled to summary judgment on the breach of contract and a claim of breach of the implied covenant of good faith and fair dealing. He also agreed with Google that the publishers’ request for declaratory relief is invalid after the initial claims failed.