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USA: Suit over AdWords budget limits ends with settlement

A class action law suit against Google will only make lawyers rich and leave advertisers with advertising credit. Want proof? Google has settled a lawsuit filed by advertisers (CLRB Hanson Industries of  Minnesota and Howard Stern of New Jersey) who claimed they were charged for more ads through the AdWords system than they had agreed to pay. The lawsuit, filed in 2005 in Santa Clara Superior Court in California, sought damages, restitution, and injunctive relief to remedy Google’s practice of (1) charging its AdWords advertisers up to 120% of their per day daily budget on any given day (Plaintiffs’ “120% claims”); and (2) charging AdWords customers who paused their campaigns more than their per day Daily Budget times the number of days their campaigns were not paused during the billing period.

Under the terms of the proposed Settlement Agreement, Google has agreed to pay $20,000,000 in a combination of cash and AdWords Credits. Both plaintiffs will receive $20,000; Google agreed to pay their lawyers more than $5 million. Other affected advertisers will get AdWords credits. Google argued that it had only overcharged advertisers to make up for days when it under-delivered ads, but still chose to end the litigation with a settlement. A spokesman 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.”

CLRB Hanson Industries v. Google, 5:05-cv-03649-JW (settlement papers filed March 26, 2009).

For more information see: Goldman, CLRB Hanson v. Google Preliminarily Settles for $20M, Technology & Marketing Law Blog





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