SAN FRANCISCO • Uber Technologies is accustomed to getting sued. Now it's doing the suing. And it's partly thanks to Breitbart News.
The global ride-hailing company is taking advertising agency Fetch Media 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.
Uber filed the lawsuit on Monday, in which it said the company discovered something was amiss when it cancelled a campaign on the conservative website Breitbart, where Fetch was placing Uber ads.
As part of the lawsuit, Uber plans to seek at least US$40 million (S$54 million) in damages, according to people familiar with the matter, who asked not to be identified for disclosing legal plans. Fetch did not immediately respond to requests for comment.
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 named a defendant in about 250 federal cases. The data is not comprehensive but shows Uber is usually on the legal defensive.
Online advertising fraud has been a problem for the industry since the dawn of the Internet. The practice has grown more sophisticated in recent years along with the amount spent on such ads. Fetch has acknowledged the challenge publicly and said it was working with research firm Forensiq to "fight against mobile ad fraud".
"One of the biggest challenges we face as digital marketers is to reduce mobile ad fraud," Mr James Connelly, Fetch's chief executive officer, said a year ago. Around the same time, Fetch's global head of media Steve Hobbs told Adweek a "significant amount" of downloads in Fetch's system had been flagged as suspicious. "Where there's money, there is fraud," he said.
The minimum amount Uber plans to seek in damages from advertising agency Fetch Media for click fraud
Uber learnt of the alleged fraud when it was trying to avoid scandal of a different kind. It had asked Fetch not to post advertisements on Breitbart News, a site run by US President Donald Trump's former chief strategist Steve Bannon. But it saw ads appearing there anyway.
After Fetch pulled the ads, 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 overbilling.