Google to settle advertisers’ 14-year-old class action with US$100M cash

CALIFORNIA: After a long-running lawsuit that lasted 14 years, Google agreed to pay US$100 million (S$134.09 million) in cash to settle claims that it overcharged advertisers by failing to provide promised discounts and charging for ad clicks outside targeted geographic areas. The preliminary settlement was filed late Thursday in the San Jose, California, federal court and is awaiting a judge’s approval, according to Reuters.

The class action, which began in March 2011, involved advertisers using Google’s AdWords programme, now called Google Ads. Advertisers claimed that Google manipulated its Smart Pricing formula to reduce discounts artificially and misled them by failing to limit ad distribution to the locations they had chosen. They argued that this violated California’s unfair competition law.

The settlement on Thursday covered advertisers who used AdWords between Jan 1, 2004 and Dec 13, 2012.

While Google agreed to settle, it has denied any wrongdoing. Spokesman Jose Castaneda said in an emailed statement that the case involved “ad product features” that Google had changed over a decade ago and has resolved.

Meanwhile, online commenters called the settlement “peanuts” and “pocket change” for the company. One remarked, “Sad to say, but to Google, US$100 million means nothing.” Another noted that for a company worth trillions, the settlement was “just a slap on the wrist”.

Plaintiffs’ lawyers may request fees up to 33% of the settlement amount and US$4.2 million to cover expenses.

Court documents showed that the case took a long time due to extensive evidence. This included more than 910,000 pages of documents and multiple terabytes of click data from the company, and both sides attended six mediation sessions with four different mediators before reaching a settlement.

The case, Cabrera et al. v Google LLC, was filed in the US District Court, Northern District of California, under case number 11-01263./TISG 

Read also:  Google employees track layoffs with circulating Google Doc as job cuts continue