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