Google allocates $100 million to compensate advertisers for overpriced ads
Google agrees to pay $100 million to settle long-running ad lawsuit
Google has agreed to pay $100 million to settle a class action lawsuit that has spanned over 14 years.
The lawsuit, initially filed in March 2011, alleges that Google overcharged advertisers by failing to provide promised discounts and by charging for clicks on ads outside the geographic areas that advertisers had specifically targeted, reports Reuters.
The settlement, which was filed Thursday in the U.S. District Court for Northern California, is still subject to judicial approval. The legal action centers on Google’s AdWords program, now known as Google Ads.
Advertisers claimed that the company manipulated its Smart Pricing formula to reduce the discounts they were entitled to, breaching the terms of their contracts. Additionally, Google was accused of misleading advertisers by not limiting ad distribution to their chosen locations, violating California’s unfair competition law.
Details of the Settlement
The settlement applies to advertisers who used the AdWords platform between January 1, 2004, and December 13, 2012. While Google has denied any wrongdoing, it has agreed to settle the case. The company maintains that the changes to its ad product were implemented over a decade ago, with spokesperson Jose Castaneda stating, "We're pleased it's resolved."
The plaintiffs' lawyers may request up to 33% of the settlement amount as fees, in addition to $4.2 million for expenses. The lawsuit dragged on for years, with the parties involved reviewing over 910,000 pages of documents and multiple terabytes of click data from Google. Furthermore, the case saw six mediation sessions before a settlement was reached.
Moving Forward
This settlement, if approved, will provide a resolution to a significant legal challenge for Google. While the company has not admitted to any wrongdoing, the case underscores ongoing concerns about transparency and fairness in digital advertising practices.
Advertisers who participated in the class action can expect compensation, and other tech companies may be closely watching the outcome as it could influence future legal battles involving advertising practices.
Recently we wrote, that Google Play has restricted access to 17 unregistered overseas cryptocurrency exchanges in South Korea, following a formal request from the country’s Financial Intelligence Unit (FIU).
