On Wednesday, U.S. District Judge Phyllis Hamilton rejected Groupon’s request for dismissal of a proposed false advertising class action, ruling that some parts of the suit against the daily deal leader could proceed. In the suit, a San Francisco-based tour company alleges that Groupon buys up Google Adwords related to tours of San Francisco attractions such as Alcatraz prison. The tour company maintains that Groupon’s actions constitute bait and switch advertising because after consumers click the tour-related link, they are taken to a website that does not feature coupons for any tours. The company also alleges that the practice drives up the cost of tour-related Adwords while diminishing the prominence of the company’s ads in Google searches.
Click here to read Reuters coverage of the case.
Click here to view the complaint.