Google Hit with Class Action Lawsuit over Denied AdSense Payments

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Google Inc. has been hit with a class action lawsuit alleging it wrongfully denies payments to thousands of website operators who use the Google AdSense advertising program to post ads on their websites.

Google introduced its AdSense program to induce website operators to host advertisements on their websites in exchange for a share of the fees paid by the advertiser. AdSense participants earn money when visitors to their websites view or interact with the posted advertisements.

“The AdSense program is enormously popular,” the Google class action lawsuit says. “This popularity translates annually to billions of dollars payable to AdSense publishers – Google’s parlance for website operators that host its ads.”

However, the class action lawsuit alleges that Google will often shut down AdSense accounts shortly before a periodic payment is due and denies payment to the AdSense publisher, regardless of the number of ads the publisher served to its website visitors during the payment period.

The AdSense class action lawsuit was filed by plaintiff Free Range Content Inc., a California corporation that owns and operates the website Repost.us, which formerly used Google’s AdSense program to host ads. Free Range claims that it had used Google AdSense successfully from July 2012 until February 2014, when it experienced a significant spike in earnings from the program. Free Range self-reported the spike to Google, hoping to understand the reason for the sudden earnings spike and to correct the issue if necessary.

On Google’s request, Free Range set up an appointment to speak with an AdSense representative, scheduling a phone call for March 6, 2014. At the end of February, Google issued a report indicating that Free Range’s AdSense earnings for the payment period were more than $40,000, a number that seemed excessive based on its history with the AdSense program. Free Range estimated that it would realistically be owed somewhere between $8,000 and $11,000 for AdSense ads it had served.

On March 4, Free Range Learned that Google had disabled its AdSense account due to a detection of “invalid activity” in the account. According to the AdSense class action lawsuit, Free Range immediately appealed the account termination, seeking to have its AdSense account reinstated and payment of the money it had earned from the advertisements posted on its website. The phone call with the AdSense representative did not provide much insight and confirmed that Free Range would only be paid its earnings for the last payment period if Google granted its appeal. On March 7, Free Range received a letter from Google that rejected the appeal.

Free Range alleges that its experience with denied AdSense payments is not unique. “Google’s wrongful refusal to pay publishers terminated from the AdSense program any of the sums owed to them for serving ads since the last program payment has spawned a plethora of bitter complaints detailed at various places on the web,” the AdSense class action lawsuit reads. Free Range cites a number of complaints from other web operators who similarly claim that they were wrongfully denied AdSense payments.

The class action lawsuit also claims that an anonymous, self-described “former Google employee” leaked information at the end of April indicating that Google systematically began banning AdSense publishers shortly before they were to be paid, as a reaction to financial losses the company suffered in 2009. Google has denied these allegations.

Free Range filed the AdSense class action lawsuit on behalf of itself and all “U.S. Google AdSense publishers whose AdSense account was disabled or terminated, and whose last earned AdSense program payment was withheld in its entirety, and permanently, by Google.” Free Range estimates that the class could consist of “many tens or even hundreds of thousands” of Class Members.

The AdSense class action lawsuit alleges Google’s actions constitute breach of contract, breach of the implied covenant of good faith and fair dealing, unjust enrichment, and violations of California’s Unfair Competition Law.

The plaintiff is represented by Steve W. Berman, Robert F. Lopez and Jeff D. Friedman of Hagens Berman Sobol Shapiro LLP.

The Google AdSense Class Action Lawsuit is Free Range Content Inc. v. Google Inc., Case No. 5:14-cv-02329, in the U.S. District Court for the Northern District of California, San Jose Division.

UPDATE: On March 1, 2018, Google agreed to pay $11 million to end a class action lawsuit alleging the tech giant denied payments to websites who used their AdSense program.

UPDATE 2: May 2018, the Google AdSense class action settlement is now open. Click here to file a claim.