The lawsuit, filed by Kabateck Brown Kellner, LLP in U.S. District Court in San Jose, Calif. on behalf of plaintiff David Almeida, seeks class action certification, with the affected class being AdWords customers who left the "'CPC [cost-per-click] content bid' input [box] blank" when setting CPC bids.
Google allows its AdWords advertisers to set the maximum CPC they will pay when people click on their ads. Advertisers can submit different bid limits for ads that appear in search results lists and ads that appear, through Google's AdSense program, on Google partner Web sites.
The problem, according to the lawsuit, is that Google doesn't make it clear that to avoid running ads on the Google AdSense network, one must enter a zero into the appropriate input box rather than leaving it blank.
"This action arises from the fact that Google does not inform its advertisers that if they leave the content bid CPC input blank, Google will use the advertiser's CPC bid for clicks occurring on the content network," the legal filing says. "Google does this despite the fact that ads placed on the content network are demonstrably inferior to ads appearing on search result pages."
Attorney Brian Kabateck said that Google "is not fully disclosing what they're doing." Most people will incorrectly assume, he argues, leaving the input box blank will result in nothing being spent on content network ads.
"This affects the most unsophisticated customers the most," Kabateck said, noting that big companies like Amazon and Wal-Mart work with Google ad sales representatives who can guide them through AdWords bid process.
As the legal filing puts it, "By redefining the universally understood meaning of an input form left blank, and then intentionally concealing this redefinition, Google has fraudulently taken millions of dollars from Plaintiff and the members of the class."
Not all lawsuits seeking class-action status are certified thus, but Kabateck expressed confidence that this case will be certified.
Kabateck previously represented aggrieved AdWords customers in Advanced Internet Technologies (AIT) v. Google, a case that was eventually folded into the $90 million click fraud settlement that Lane's Gift's and Collectibles, in a similar suit, won in 2006. He also won a multi-million dollar click-fraud judgment against Yahoo.
In March, Kabateck's firm sued Apple for allegedly deceiving consumers by failing to disclose that its new 20-inch iMac monitors are technically inferior to previous generations and the new 24-inch iMac.
A Google spokesperson said the company had not yet seen the complaint and thus could not comment.