Google will pay $100 million to settle a long-running class action lawsuit that had accused the company of overcharging advertisers, while also allegedly not targeting their ads at viewers in locations the advertisers had desired.
Under the deal, which was filed in San Jose federal court, attorneys for the plaintiffs could potentially claim 33% of the total, or nearly $33 million.
Advertisers included in the potential settlement class - which could number in the hundreds of thousands - would receive a cut of the remaining funds. According to the settlement documents, the money would be distributed based on numbers of "clicks" ads may have received, using a specific formula developed for the settlement.
A judge has not yet approved the settlement.
Should the deal win preliminary approval, the parties would move toward next steps, including notifying potential class member advertisers, who would then be able to submit claims to determine if they are eligible for a cut of Google's payout.
The settlement documents do not estimate how much a typical claimant may receive under the deal.
A court would then set a hearing for final approval in coming months.
The settlement could resolve a dispute that has simmered in federal court since 2011.
At that time, a group of plaintiffs, now led by named plaintiffs Rene Cabrera, of Florida, and a corporation known as RM Cabrera Company Inc., filed suit, claiming Google had allegedly misled them about the geographical targeting and reach of advertising they had purchased under Google's former AdWords program.
The lawsuit further accused Google of essentially overcharging advertisers by not always applying the company's so-called Smart Pricing discounts to their advertising purchases. The discounts allegedly were supposed to be applied using a multiplier based on Google's determination that a particular ad would be less likely to generate clicks than a particular "benchmark property."
The plaintiffs alleged Google was contractually obligated to apply those discounts to all ad clicks on its platform.
The plaintiffs asserted Google's alleged failure to abide by those alleged contractual terms amounted to violations of California's unfair competition law.
Google disputed the claims throughout the process.
However, the tech giant failed to secure dismissal of the class action after nearly 14 years in court, leading to the settlement.
According to the settlement filing, "expert" witnesses hired by the plaintiffs had estimated they could have been eligible to receive as much as $720 million under California law, should a jury had rendered a verdict in their favor at trial.
So, they estimated the $100 million settlement meant plaintiffs had received about 14-18% of total damages they could have received.
Plaintiffs' lawyers asserted the settlement represents a significant return, given the risks of taking the case to trial, where they also may have received much less.
The settlement does not indicate how many people may be included in the deal. However, at the time they filed their complaint, plaintiffs said the class could included hundreds of thousands of potential class members.
Plaintiffs are represented by attorneys Stacey M. Kaplan, Joseph H. Meltzer, Matthew L. Mustokoff, Margaret E. Mazzeo and Dylan Isenberg, of Kessler Topaz Meltzer & Check, of San Francisco and Radnor, Pennsylvania; and Jeffrey J. Angelovich, Michael G. Angelovich, Bradley E. Beckworth, Andrew G. Pate and Jessica Underwood, of Nix Patterson LLP, of Austin, Texas.
Google has been represented by attorneys Edward D. Johnson, Kristin W. Silverman, Elspeth V. Hansen, Ankur Mandhania, Andrew J. Pincus and Daniel E. Jones, of the firm of Mayer Brown LLP, of Palo Alto and Washington, D.C.