Supreme Court Snubs Google’s AdWords Appeal

The U.S. Supreme Court on Monday declined to hear Google’s appeal of a lower court ruling in a suit alleging the company used deceptive practices in the sale and placement of advertising through its AdWords program between 2004 and 2008.

Google, a unit of Alphabet, sought to overturn the 9th U.S. Circuit Court of Appeals September 2015 ruling that the lawsuit could go forward as a class action case.

The case, originally filed in 2008, alleges that Google placed clients’ advertising on parked domain and error pages, where few if any advertisers would want to display their products. Google did not disclose that practice to its customers, according to court documents.

The Google AdWords program is an auction-based, online advertising platform that displays advertising on the Google search engine after users look up a particular search term. Google charges advertisers on a pay per click model. Error pages and parked domain generally are considered worthless sites.

Error pages generally appear when a person enters an unregistered URL into the address bar.

California Case

Google’s ad placement practice violated California state laws, including the Unfair Competition Law and False Advertising Law, the suit maintains.

Because the case involves multiple plaintiffs seeking various degrees of individual damages, it should not be certified as class action, Google has argued.

Google declined to comment for this story, as the litigation is pending.

However, a source familiar with the case told the E-Commerce Times that Google disputes the original plaintiffs’ claims that the company made misleading comments about the possibility that ads would appear on error pages and parked domain sites.

Many of the advertisers benefited from having their ads appear on those pages, Google has said in court filings.

The case is limited to the 2004-2008 period, because Google changed its participation practices, making AdWords for Domains and AdWords for Errors opt-in.

Still, the class action suit could involve hundreds of thousands of advertisers and result in millions of dollars in damages.

Sites Considered ‘Garbage’

“Google engaged in some pretty egregious conduct,” said Robert Schubert, attorney with San Francisco law firm Schubert, Jonckheer & Kolbe, which is representing the plaintiffs in the case.

Google placed the ads on what the plaintiffs considered “garbage sites,” he told the E-Commerce Times.

The advertisers would have paid less money for the ads had they known they would be placed on those sites, Schubert said, adding that he hopes to get the case back to court within a year.

It is too early to tell what long-term impact the Supreme Court’s rejection of the case could have on Google, said Rick Edmonds, media business analyst at the Poynter Institute.

“Letting the suit go forward does not necessarily mean it will succeed,” he told the E-Commerce Times.

Google generated $67 billion in ad revenue in 2015.

Just last month, it agreed to stop accepting ads for predatory payday loan services on its website. The company has taken steps over the years to reduce nuisance advertising on its search engine, disabling more than 780 million ads in 2015.

David Jones is a freelance writer based in Essex County, New Jersey. He has written for Reuters, Bloomberg, Crain's New York Business and The New York Times.

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