• by Wendy Davis  @wendyndavis, March 28, 2025

Google has agreed to pay $100 million to settle claims that it overcharged some pay-per-click advertisers by allegedly failing to honor their requests to limit ads geographically, and allegedly reneging on a promise to discount some ads.

If accepted by U.S. District Court Judge Edward Davila in San Jose, the deal will resolve a lawsuit dating to 2011, when advertiser Rene Cabrera claimed he was overcharged for pay-per-click ads he purchased to market his former business, Training Options.

Cabrera alleged in a class-action complaint that he bought pay-per-click ads from Google between 2008 and 2009, and that the company failed to correctly apply its “smart pricing” discount during that time, and also charged him for clicks that originated from states other than the ones he was targeting. He targeted Florida, North Carolina, Georgia, and Louisiana, but alleged that he was charged for clicks from users in New York, Virginia, California, Illinois, Texas, and other states, according to court papers.

Davila originally threw out the lawsuit on the grounds that Cabrera no longer owned Training Options, but the 9th Circuit Court of Appeals revived the case in 2021. The appellate court said that Cabrera's continued control over his Google advertising account gave him “standing” to pursue a lawsuit against the company.

After the 9th Circuit sent the case back to Davila, Google argued that its agreement advertisers doesn't set out a particular “smart pricing” formula. The company also argued that it disclosed in the “Help Center” that ads could be shown to users regardless of their location.

In 2023, Davila rejected Google's bid for summary judgment on both points, paving the way for Cabrera to attempt to prove his claims at trial, or to enter into a settlement.

The settlement class includes everyone who advertised on the Google platform formerly called AdWords between January 1, 2004 and March 22, 2011, and paid for clicks that didn't originate from the location selected by the advertiser.

Davila also certified a “subclass” of advertisers, described in the court papers as follows: “All persons and entities located within the United States who, between June 1, 2009 and December 13, 2012, advertised through Google’s AdWords Program and paid for clicks on ads on Google’s Display Network where the advertiser’s settings allowed its ads to show on both the Search and Display Networks and the advertiser did not set a Display Network bid different from the Search Network bid.”

A Google spokesperson said, “This case was about ad product features we changed over a decade ago and we’re pleased it’s resolved.”