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Google defeats Zombie Go Boom 'Adpocalypse' lawsuit

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03/08/2018 | 04:39pm CEST
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(Reuters) - A federal judge has dismissed a lawsuit challenging a decision by Google's YouTube service to drop the placement of clients' advertisements on videos that viewers might deem violent or offensive.

U.S. District Judge Edward Chen in San Francisco ruled on Wednesday that YouTube, which had faced pressure from major advertisers, had discretion under its contract with operators of the Zombie Go Boom channel and other content providers to restrict ad placements.

The plaintiffs, whose channel has 1.78 million subscribers, said in their proposed class action that YouTube made the changes, which some commentators dubbed "Adpocalypse," last March without warning or permission.

They said this caused ad revenue to fall 90 to 95 percent, to as little as $20 (14.41 pounds) a day, in connection with videos with such titles as "Donald Trump Zombie Kill Part 1!" and "Can an Xbox Kill a Zombie?" that they called "a cross between popular cable TV shows 'Mythbusters' and 'The Walking Dead.'"

But the judge said the contract made clear that YouTube, part of Mountain View, California-based Alphabet Inc, was "not obligated to display any advertisements" alongside videos.

He also said Zombie Go Boom, based in Fayetteville, Arkansas, got something out of the arrangement: the ability to post videos for free, in exchange for giving YouTube a license to its content.

"The ability to post videos, even without advertising revenue, can be valuable to content providers in reaching a wide audience," Chen wrote.

Lawyers for Zombie Go Boom did not immediately respond on Thursday to requests for comment. Google did not immediately respond to a similar request.

YouTube changed its ad placement algorithm after companies such as AT&T Inc (>> AT&T), Johnson & Johnson, JPMorgan Chase & Co (>> JP Morgan Chase & Company), Verizon Communications Inc and Britain's Marks & Spencer Group Plc (>> Marks & Spencer Group) suspended digital ads on concern YouTube was not doing enough to keep their ads away from offensive videos, including hate speech.

The case is Sweet et al v Google Inc et al, U.S. District Court, Northern District of California, No. 17-03953.

(Reporting by Jonathan Stempel in New York; Editing by Susan Thomas)

By Jonathan Stempel

Stocks mentioned in the article
ChangeLast1st jan.
AT&T -1.20% 32 Delayed Quote.-17.70%
JOHNSON & JOHNSON -0.43% 122.04 Delayed Quote.-12.27%
JP MORGAN CHASE & COMPANY -0.01% 107.54 Delayed Quote.0.56%
MARKS & SPENCER GROUP -0.24% 293 Delayed Quote.-6.73%
VERIZON COMMUNICATIONS -0.85% 48.09 Delayed Quote.-8.37%
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Financials ($)
Sales 2018 136 B
EBIT 2018 32 836 M
Net income 2018 31 266 M
Finance 2018 82 408 M
Yield 2018 -
P/E ratio 2018 26,82
P/E ratio 2019 24,99
EV / Sales 2018 5,38x
EV / Sales 2019 4,31x
Capitalization 815 B
Duration : Period :
Alphabet Technical Analysis Chart | GOOGL | US02079K3059 | 4-Traders
Technical analysis trends ALPHABET
Short TermMid-TermLong Term
Income Statement Evolution
Mean consensus OUTPERFORM
Number of Analysts 44
Average target price 1 258 $
Spread / Average Target 6,3%
EPS Revisions
Lawrence E. Page Chief Executive Officer & Director
Sergey Mikhaylovich Brin President & Director
John LeRoy Hennessy Chairman
Ruth Porat Chief Financial Officer & Senior Vice President
Eric E. Schmidt Director & Technical Advisor
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