After a 14-year legal saga, Google has agreed to a $100 million settlement to resolve allegations that it secretly overcharged advertisers and gave preferential treatment to select partners. The proposed settlement, filed in a California federal court Thursday, aims to compensate affected advertisers while sidestepping the uncertainty of a trial that was set to begin in just seven weeks.
Decade-Long Battle Nears Conclusion
The dispute dates back to March 2011, when advertisers accused Google of manipulating its AdWords platform to unfairly charge them. AdWords, a service that places ads on websites and charges per click, includes a system that purportedly discounts prices for ineffective placements. However, plaintiffs alleged Google not only failed to honor these discounts but also cut secret deals with major hosting companies, allowing them to bypass restrictions that forced others into low-performing ad spots.
Over the years, the case faced multiple dismissals, amendments, and an uphill battle for class certification. At one point, named plaintiff Rene Cabrera lost standing after selling his business that used AdWords, but the Ninth Circuit revived the class action in 2021.
Key Legal Milestones & Class Certifications
In August 2023, U.S. District Judge Edward J. Davila certified two nationwide classes of advertisers:
- Location Targeting Class: Advertisers who paid for clicks from unintended locations between Jan. 1, 2004, and March 22, 2011.
- Smart Pricing Subclass: Advertisers who, between June 1, 2009, and Dec. 13, 2012, were charged for clicks without receiving proper discounted pricing.
Judge Davila also denied Google’s attempt to strike expert testimony and rejected its motion for summary judgment, clearing the way for the case to proceed to trial.
The Road to Settlement
Before reaching Thursday’s deal, both sides engaged in six separate mediation sessions. The breakthrough came on Christmas Eve, when the parties reached an agreement in principle.
