Google has agreed to pay $100 million to settle a 14-year-old lawsuit alleging the company overcharged advertisers and failed to provide promised discounts. The lawsuit, filed in 2011, claimed Google’s ad system incorrectly charged for clicks outside targeted areas and manipulated its Smart Pricing formula.
According to Reuters, the lawsuit alleged that Google breached its contract with advertisers by incorrectly applying discounts and misleading them about ad placements. The plaintiffs also claimed that Google violated California’s unfair competition laws by failing to limit ad distribution to designated areas.
Despite denying wrongdoing, Google chose to settle the case. The settlement, which covers advertisers who used Google AdWords from 2004 to 2012, is pending judicial approval in a California federal court.
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The lawsuit, Cabrera et al v. Google LLC, was filed in the US District Court for the Northern District of California. The case involved a massive review of over 910,000 pages of documents and a thorough analysis of Google’s extensive click data. Following multiple mediation sessions, a settlement was finally reached.
Google spokesperson Jose Castaneda expressed satisfaction that the lawsuit has been resolved, noting that the ad features in question were modified over a decade ago. The settlement will benefit advertisers who used Google’s AdWords platform, now rebranded as Google Ads, between January 1, 2004, and December 13, 2012.
The plaintiffs’ lawyers may claim up to 33% of the settlement amount as fees, in addition to $4.2 million to cover their legal expenses. The court will now review the settlement for final approval.
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