Google Agrees to Pay $100 Million to Settle Long-Running Ad Dispute

Google has agreed to a $100 million cash settlement to resolve a long-standing lawsuit that alleged the company overcharged advertisers by failing to provide promised discounts and charging for ad clicks outside the targeted geographic areas. According to Reuters, the preliminary settlement was filed late Thursday in a federal court in San Jose, California, and now awaits judicial approval.

The lawsuit, which dates back to March 2011, accused Google of breaching its contract by manipulating its Smart Pricing formula, allegedly reducing discounts for advertisers in a misleading manner. Per Reuters, the plaintiffs also claimed that Google, a subsidiary of Alphabet Inc., violated California’s unfair competition law by misrepresenting the reach and distribution of its ads, resulting in charges for clicks from unintended locations.

The settlement applies to advertisers who used Google’s AdWords platform, now known as Google Ads, between January 1, 2004, and December 13, 2012. Despite agreeing to the settlement, Google denied any wrongdoing. “This case was about ad product features we changed over a decade ago and we’re pleased it’s resolved,” said Google spokesperson Jose Castaneda in an emailed statement.

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According to Reuters, the legal battle spanned over 14 years and involved extensive evidence collection. Court filings indicate that more than 910,000 pages of documents and multiple terabytes of Google’s click data were reviewed. The parties also engaged in six mediation sessions with four different mediators before reaching the settlement agreement.

Lawyers representing the plaintiffs may request up to 33% of the settlement amount in legal fees, in addition to $4.2 million to cover litigation expenses.

The case, officially known as Cabrera et al v. Google LLC, is being heard in the U.S. District Court for the Northern District of California under case number 11-01263.

Source: Reuters