Google has agreed to pay $100 million in cash to settle a long-standing lawsuit alleging that it overcharged advertisers by failing to provide promised discounts and charging for ad clicks outside targeted geographic areas.
The preliminary settlement of the 14-year-old class action, which began in March 2011, was filed late Thursday in the federal court in San Jose, California. The settlement is pending judicial approval.
Advertisers who participated in Google’s AdWords program, now known as Google Ads, claimed that the company breached its contract by manipulating its Smart Pricing formula to artificially reduce discounts. Additionally, the lawsuit accused Google, a subsidiary of Mountain View-based Alphabet Inc., of misleading advertisers by failing to restrict ad distribution to their designated locations, in violation of California’s unfair competition law.
The settlement applies to advertisers who used AdWords 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.
Attorneys representing the plaintiffs may seek up to 33% of the settlement fund in legal fees, along with an additional $4.2 million for expenses.
Court documents indicate that the case took years due to extensive evidence gathering, including the review of over 910,000 pages of documents and multiple terabytes of click data from Google. The parties also engaged in six mediation sessions with four different mediators before reaching a resolution.
The case is listed as Cabrera et al v Google LLC, U.S. District Court, Northern District of California, No. 11-01263.