Google AdSense Class Action Lawsuit Dismissed

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Last week, the class action lawsuit brought by website owners accusing Google Inc. of unfairly withholding payment for participating in AdSense, a revenue-sharing program, was dismissed by a California judge.

Google AdSense is a revenue sharing program where website owners host advertisements on their websites in exchange for a share of the fees paid by the advertiser to Google. In May of last year, lead plaintiff Free Range Content Inc. alleged that Google shut down their AdSense accounts shortly before they were due to pay website owners and completely denied payment to the AdSense publisher. The plaintiffs allege that Google breached its contract with AdSense website owners, and the Google AdSense class action lawsuit included claims of bad faith, unjust enrichment, and unjust compensation.

“The AdSense program is enormously popular,” wrote Free Range in the Google class action lawsuit. “This popularity translates annually to billions of dollars payable to AdSense publishers – Google’s parlance for website operators that host its ads,” it continued. “But as the plaintiff and many other publishers have found, Google often shuts down AdSense accounts shortly before a periodic payment is due and then denies the publisher the entirety of the expected payment, notwithstanding all the ads the publisher already has served to visitors to its website during the payment period.”

Google filed a motion to dismiss the AdSense class action lawsuit arguing that Free Range was not entitled to payment because it violated the terms of service it agreed to when it set up the account with Google. Google argued further that it was entitled to close Free Range’s AdSense account.

“After enjoying the benefits of participating in the AdSense program for a year-and-a-half, [Free Range], by its own admission, breached several explicit terms of that contract,” Google wrote in its motion to dismiss the AdSense class action lawsuit. “Google then did exactly what it said it would do in the contract – it closed plaintiff’s AdSense account, did not make a payment to plaintiff that, pursuant to numerous contract provisions, plaintiff had no right to receive, and refunded the withheld payment (along with Google’s revenue share) to advertisers,” Google concluded.

On Feb.12, U.S. District Court Judge Beth Freeman dismissed the plaintiff’s claims, writing that Free Range will have to “plead additional facts demonstrating defendant’s alleged bad faith beyond that of simply exercising a contractual right to terminate accounts and withhold payment,” in her order. Judge Freeman also ordered Free Range to show that under AdSense’s terms of service it did not waive its right to payment by failing to disputing Google’s payment withholding. Judge Freeman gave Free Range until March 5 to address those issues in an amended Google AdSense class action lawsuit complaint.

Free Range Content Inc. 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.