• Google to Pay $20 Million to Ad Search Marketers
  • April 28, 2009
  • Law Firm: Manatt, Phelps & Phillips, LLP - Los Angeles Office
  • Google Inc. has agreed to pay up to $20 million to settle a class–action lawsuit brought by search marketers claiming that the giant online company served more ads than they had agreed to pay for.

    The lawsuit arose out of a disagreement over the definition of "daily budget" in the AdWords agreement Google used for ad search marketers. The named plaintiffs, Minnesota printing company CLRB Hanson Industries and New Jersey resident Howard Stern, alleged that Google breached the AdWords contract by charging marketers up to 120% of their maximum daily budget.

    In court papers, Google admitted that it sometimes charged up to 120% of marketers’ maximum daily budgets, but argued that it did so only to make up for days when it underdelivered ads.

    In a statement, a company spokesperson said, "Google believes the claims are without merit, but we are pleased to have the litigation behind us and to move forward with our business objectives."

    Most of the settlement will be in the form of ad credits for AdWords marketers, but the two named plaintiffs will receive $20,000 each and the plaintiffs’ lawyers will receive more than $5 million in attorneys’ fees. In a prior ruling, a federal district court in San Jose limited the class to ad search marketers who advertised with Google for fewer than 30 days.