'Faithless business partner' Uber sued for $20 million by ad agency Fetch

The Uber app
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Mobile ad agency Fetch has filed a lawsuit against Uber, claiming that the taxi app firm owes it $19.7 million in unpaid invoices.

The move marks the latest step in a legal row that started in September. Uber had initially sought $40 million in damages from Fetch, alleging that the Dentsu-owned agency billed it for fake clicks on its online ads, allegations that Fetch denied.

But Uber voluntarily dismissed that lawsuit on December 22, Reuters reported Tuesday, after the case was reassigned to Judge Yvonne Gonzalez Rogers at the U.S. District Court, Northern District of California. It said it would seek claims in a San Francisco state court instead.

A phone displays the Uber ride-hailing app on September 22, 2017 in London, England. Uber is appealing Transport for London's decision not to renew its operating license.
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Now Fetch has asked for Judge Rogers to determine both companies' contractual responsibilities and to direct Uber to pay it the monies Fetch claimed it is owed.

Uber is said to have noticed a problem when it canceled a campaign set to appear on the Breitbart News website, where ads were placed by Fetch, but they continued to appear on the site. Uber said the agency was "running a wild west of online advertising fraud," and claimed credit for app downloads that happened without customers clicking on ads.

Fetch CEO James Connelly told CNBC via email in September that it had terminated its two-year agreement with Uber in May 2017 due to non-payment of invoices and that it had advised the company on reducing ad fraud.

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Fetch has called Uber a "faithless business partner" in its current court filing and added that its work helped the company acquire more than 35 million new users.

Ad fraud, where bots rather than humans view or click on ads, was estimated to cost businesses $16.4 billion in 2017, according to a report by ad verification company Adloox.

Uber did not immediately respond to a request for comment when contacted by CNBC.