Google to pay $100 million to settle long-running advertiser lawsuit
- Marijan Hassan - Tech Journalist
- 4 days ago
- 2 min read
Google has agreed to pay $100 million to settle a class-action lawsuit accusing the tech giant of overcharging advertisers by failing to apply promised discounts and charging for clicks outside targeted geographic areas. The lawsuit, which has been ongoing for 14 years, reached a preliminary settlement late Thursday in a San Jose, California, federal court. The agreement still requires judicial approval.
Details of the lawsuit
The case, originally filed in March 2011, involved advertisers who participated in Google's AdWords program (now Google Ads) between January 1, 2004, and December 13, 2012. The plaintiffs alleged that Google breached its contract by manipulating its Smart Pricing formula to reduce discounts unfairly. Additionally, they accused the company of misleading them by displaying ads outside the geographic regions they had specified, violating California's unfair competition law.
Google denied any wrongdoing but chose to settle the lawsuit to put the issue to rest. "This case was about ad product features we changed over a decade ago, and we're pleased it's resolved," Google spokesperson Jose Castaneda stated in an emailed comment.
Settlement terms
The settlement fund will compensate eligible advertisers who used AdWords during the specified period. Lawyers representing the plaintiffs may seek up to 33% of the settlement amount in legal fees, along with an additional $4.2 million for expenses.
The lawsuit's lengthy duration was attributed to extensive legal proceedings, which included the review of more than 910,000 pages of documents and multiple terabytes of click data from Google. The parties engaged in six mediation sessions before four different mediators before reaching a settlement agreement.
The case is officially recorded as Cabrera et al v. Google LLC, U.S. District Court, Northern District of California, No. 11-01263.
