Google Settles $100 Million Lawsuit Over Advertisers’ Overcharges

Google has agreed to pay $100 million to settle a long-running class-action lawsuit filed by advertisers who accused the company of overcharging for ads.

The lawsuit, initially filed in 2011, alleged that Google failed to provide promised discounts and charged advertisers for ad clicks outside their targeted geographic areas.

Background of the Lawsuit

The legal dispute stemmed from Google’s AdWords program (now Google Ads), which businesses used to place targeted advertisements. Plaintiffs claimed that between January 1, 2004, and December 13, 2012, Google manipulated its Smart Pricing formula to reduce discounts unfairly and did not adhere to advertisers’ specified geographic targeting. The lawsuit argued that these practices violated contractual agreements and California’s unfair competition law.

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The proposed $100 million settlement, filed in a San Jose, California federal court, is pending judicial approval. While Google denies any wrongdoing, the company stated that resolving the lawsuit allows it to focus on its ongoing advertising initiatives. Notably, the ad product features at the centre of the lawsuit have been modified over a decade ago.

Legal Implications and Industry Impact

The settlement follows years of litigation, which involved extensive evidence gathering, including over 910,000 pages of documents and terabytes of click data. Plaintiffs’ lawyers are expected to seek fees amounting to 33% of the settlement fund, plus additional costs. The case highlights the growing scrutiny of digital advertising practices and the need for greater transparency in ad billing and targeting mechanisms.

For advertisers who used Google’s AdWords during the specified period, this settlement may provide financial relief. Additionally, it reinforces the importance of monitoring advertising expenditures and ensuring compliance with agreed-upon terms.