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Lawsuit claims Google overcharges advertisers

'Without merit', Google says

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A group of advertisers last week filed a class action suit against Google, accusing the search engine of overcharging advertisers who use its paid search advertising services, according to Reuters.

Google offers two paid search advertising services. The AdSense system allows advertisers to display targeted ads on content related websites in return for the payment of a fee to Google each time an internet user clicks on one of their ads. Google then repays part of the fee to the web page owner.

This is different to Google's AdWords service, which allows advertisers to sponsor particular search terms so that, whenever that term is searched in Google, the advertiser's link will appear next to the search results.

Internet search advertising is Google’s biggest money-earner, accounting for the bulk of the $1.384 billion generated by the company in the second quarter of this year.

It has sued and been sued before over Click Fraud, a practice of using automated software to click on a company's ads. The latest lawsuit appears to be a different problem.

According to Reuters, a class action has been filed in Santa Clara Superior Court that accuses the search engine of charging advertisers more than the daily limits that the system lets advertisers choose.

The suit, filed by CLRB Hanson Industries LLC and others, also alleges that Google has not reimbursed what it says are unlawful charges, and has disputed advertiser complaints.

Google spokesman Steve Langdon told Reuters: "The claims are without merit and we will defend against it vigorously."

© Pinsent Masons 2000 - 2005

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