The Ninth Circuit heard oral argument in a breach of contract dispute over how Reddit bills advertisers for pay-per-click campaigns.
Levelfields, Inc., an advertising agency, sued Reddit, Inc., alleging that the platform charged for clicks that never reached actual users. The core of the dispute centers on whether a "click" under their agreement requires a genuine user-initiated action that successfully delivers traffic to an advertiser's landing page, or whether it encompasses any interaction with an ad link regardless of destination.
Levelfields argued that Reddit could not bill for non-genuine, non-user-initiated events as if they were valid clicks. The agency pointed to an email from a Reddit sales representative stating that a click is "an event that takes a user to your landing page." Levelfields also contended that Reddit's refusal to provide IP addresses for the clicks rendered a contractual claims process illusory, preventing the agency from detecting potential fraud or determining if clicks originated from Reddit's own servers.
Reddit defended its billing practices by arguing that the contract does not define "click," meaning the ordinary, unambiguous understanding of the term controls. Reddit's counsel emphasized that the contract explicitly acknowledges that third parties or bots may generate clicks for prohibited purposes, and advertisers assume this risk. The platform argued that Levelfields failed to follow the contractual process for disputing charges and never provided specific data showing a discrepancy between billed clicks and actual site traffic.
During the argument, judges questioned whether Levelfields adequately utilized the contract's sole remedy clause, which requires advertisers to bring billing discrepancies to Reddit within 45 days. Reddit's counsel noted that Levelfields never articulated the specific anomalies or provided data to support its claims of overbilling, relying instead on a general request for IP addresses that the contract did not require Reddit to provide.
Levelfields countered that its request for IP addresses was necessary to detect fraud, as the data might reveal clicks originating from Reddit's own servers. The agency argued that treating any link interaction as a billable click gives Reddit unchecked discretion to define what is chargeable, effectively nullifying the advertiser's protections.
The case remains pending as the Ninth Circuit considers whether the district court properly dismissed Levelfields' first amended complaint on a motion to dismiss.