Google has agreed to pay $100 million in cash to settle a long-standing lawsuit alleging that it overcharged advertisers by failing to provide promised discounts and charging for ad clicks outside targeted geographic areas.
The preliminary settlement of the 14-year-old class action, which began in March 2011, was filed late Thursday in the federal court in San Jose, California. The settlement is pending judicial approval.
Advertisers who participated in Google’s AdWords program, now known as Google Ads, claimed that the company breached its contract by manipulating its Smart Pricing formula to artificially reduce discounts. Additionally, the lawsuit accused Google, a subsidiary of Mountain View-based Alphabet Inc., of misleading advertisers by failing to restrict ad distribution to their designated locations, in violation of California’s unfair competition law.