Google Settles AdWords Suit: $100M Payout

Google has agreed to pay $100 million as part of a settlement resolving a class-action lawsuit originally filed in 2011. Advertisers had accused the company of breaching the terms of its AdWords platform (now Google Ads), alleging that it unjustifiably inflated ad costs and charged fees for impressions shown outside the specified geographic regions.

The preliminary settlement was submitted on March 28 to the federal court in San Jose, California, and still awaits judicial approval. The suit encompasses advertisers who used AdWords between January 1, 2004, and December 13, 2012.

According to the plaintiffs, Google manipulated its Smart Pricing mechanism, diminishing the discounts that were supposed to be applied based on ad performance. Additionally, the company allegedly failed to confine ad displays to the geographic areas selected by advertisers, a violation of California’s Unfair Competition Law.

While Google did not admit any wrongdoing, it agreed to the payout. Company spokesperson José Castañeda remarked that “the case pertains to advertising product features that were modified over a decade ago,” and expressed satisfaction that the dispute had been resolved.

Plaintiffs’ attorneys intend to request up to 33% of the settlement as legal fees, along with $4.2 million to cover litigation expenses.

Court filings reveal that the protracted nature of the case stemmed from the extensive volume of evidence: the parties exchanged more than 910,000 pages of documents and several terabytes of clickstream data, and engaged in six mediation sessions with four different mediators.

The lawsuit is registered under case number 11-01263 in the U.S. District Court for the Northern District of California and is formally titled Cabrera et al. v. Google LLC.