Google has had a class-action lawsuit in the US over last year's changes to its AdSense advertising system thrown out of court.
Judge Edward Chen of the California Northern District Court dismissed (PDF) with prejudice (meaning the case may not be re-filed) the complaint brought by Zombie Go Boom, a YouTube broadcaster that had accused Google and YouTube of unfair practices and breach of contract.
The complaint, filed on behalf of a class of all content providers with a public video on YouTube from March 1 2017, alleged that the Google-owned video-streaming site violated unfair competition and breach of contract laws when it overhauled the AdSense system last Spring.
Claiming that its videos had been unfairly flagged as objectionable, Zombie said YouTube illegally demonetized (stopped running paid ads) the videos, costing the video maker thousands in advertising revenues and lost endorsement contracts.
Google, meanwhile, moved to have the case thrown out, arguing that the "adpocalypse" algorithm changes were entirely within its rights and were covered by the terms of service (TOS) agreement Zombie consented to when it created a channel on YouTube.
Judge Chen found that in this case the TOS was crucial as both sides had cited the document; Zombie in claiming breach of contract and Google in arguing the terms stated YouTube had no obligation to display any ads if it so chose to.
The judge found that, because the TOS did not oblige YouTube to display ads, and because the TOS contract was not for advertising but for hosting the videos, YouTube was well within its rights to suspend some or all ads on any channel and there was no standing for breach of contract or dealing in bad faith.
"Regardless of how YouTube exercised its discretionary power in determining whether to display advertisements under the Partner Program Terms, the agreement (which consists of both the TOS and Partner Program Terms) between Zombie and YouTube was supported by adequate independent consideration," Chen explained this week.
"In particular, YouTube allowed Zombie to post videos on its forum free of charge in exchange for getting a license to its content."
In summary, the court says that YouTube has every legal right to cut some or all ads from any YouTube channel, and the TOS content creators agreed to when they created their channels does not guarantee ad payments. ®