Google settles class-action lawsuit for $100 million over advertising practices

Google has come to an agreement to pay $100 million to resolve a class-action lawsuit that was initiated back in 2011 by users of its AdWords advertising service. Reuters reported today that the settlement is pending court approval and was filed late Thursday in a federal court in San Jose, California.

The origins of this legal battle date back to March 2011, when a user took legal action against Google over its AdWords service, which has since been rebranded as Google Ads. AdWords allows businesses to showcase their advertisements on Google’s search engine and various third-party websites. The lawsuit particularly focused on two features of AdWords that were available from the beginning of 2004 through December 13, 2012.

The first aspect in question was Smart Pricing, a feature that offered companies discounts on advertising space purchased through AdWords. The extent of the markdown depended on the likelihood that a click on an ad would lead to a sale or another outcome specified by the advertiser. The lawsuit alleged that Google did not fulfill all of the Smart Pricing discounts promised to customers, despite being contractually obligated to do so under an agreement that did not explicitly mention Smart Pricing.

Another contentious feature was the ability for marketers to restrict the reach of AdWords ads to specific locations. The plaintiffs claimed that Google at times displayed ads to users outside the designated locations, which they argued violated California competition laws. During the lawsuit’s period, AdWords determined users’ locations based on their IP addresses and search history, sometimes leading to ads appearing for users located outside the targeted area.

This lengthy legal battle involved extensive analysis of evidence, with the plaintiffs requesting over 910,000 pages of documents from Google and terabytes of click data. A spokesperson for Google expressed satisfaction at the resolution of the case and highlighted that it involved features that had been altered over a decade ago.

This settlement comes on the heels of another class-action lawsuit settled by Google relating to Chrome’s Incognito mode, which required the tech giant to delete or anonymize vast amounts of user data collected by the browser. The conclusion of this lawsuit signifies the end of a decade-long legal process, addressing key concerns regarding Google’s advertising practices and user data privacy.