Appellate Court Upholds AdWords Settlement

The 9th Circuit Court of Appeals has upheld a $20 million settlement of a class-action lawsuit against Google by AdWords marketers. The settlement requires Google to give some search marketers credits that can be applied to their ad campaigns.

The lawyers who brought the suit behalf of search marketers will receive up to $5 million. The long-running lawsuit, which dates to 2005, centered on allegations that Google served more ads than marketers had agreed to pay for. Two advertisers -- Minnesota printing company CLRB Hanson Industries and New Jersey resident Howard Stern (no relation to the radio personality) -- alleged in the lawsuit that Google violated the AdWords agreement by charging marketers up to 120% of their maximum daily budget. Before settling the case, Google filed court papers stating that it sometimes charged up to 120% of the daily budgets, but only to make up for days when it under-delivered ads. After a settlement was announced, the law firm Weiss & Associates -- which also used AdWords -- challenged the deal. The firm, which alleged that it was overcharged $135,000 by Google, argued that the settlement wasn't fair or reasonable. The law firm argued to the 9th Circuit that $20 million was inadequate because that figure “appears to be significantly less than the potential recovery from litigation.” But the 9th Circuit rejected those arguments this week. “The district court did not clearly abuse its discretion in approving the settlement,” the 9th Circuit said in its two-page order.