Sarah Mirando  |  August 30, 2011

Category: Legal News

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Groupon settlementA federal judge has approved parts of a class action lawsuit against Groupon that accuses the company of inflating Google keyword prices through false advertising.

The Groupon class action lawsuit, filed earlier this year by two San Francisco-area tour companies, alleges Groupon engages in a bait-and-switch advertising scheme in which it buys tour-related keywords on Google’s AdWords service, but often does not actually offer tour coupons when customers arrive at the site. This inflates the price of keywords for the tour companies, but actually decreases the prominence of their ads in Google searches, the Groupon AdWord class action lawsuit states.

Groupon asked a federal judge to dismiss the false advertising lawsuit, but U.S. District Jduge Phyllis Hamilton ruled last week that certain allegations against Groupon can proceed. The Plaintiffs will have the opportunity to adjust their dismissed claims against Groupon and try them again.

The Groupon advertising class action lawsuit is asking for a temporary restraining order enjoining Groupon from using bait-and-switch ads and an award of damages.

The case is San Francisco Comprehensive Tours, LLC dba San Francisco Shuttle Tours, LLC and Wine Country Tour Shuttle v. Groupon, et al., Case No. 11-cv-1300, U.S. District Court, Northern District of California.

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