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Google faces lawsuit alleging widespread AdSense fraud

The proposed class action lawsuit references an anonymous claim that Google ‘color codes’ subscribers

May doesn’t seem to be a lucky month for Google’s in-house team. First, a European court ruled that citizens held a “right to be forgotten” online, which led to the search giant being flooded with takedown requests. And now, it is Google’s advertising methods that are seeing their day in court, with a new lawsuit claiming that the tech company engaged in widespread fraud.

The proposed class action lawsuit, filed on May 20, alleges that Google cancelled AdSense accounts just before they were eligible to pay out, denying publishers from collecting promised money. The suit claims that these cancellations were part of a widespread AdSense fraud scheme.

“Google's actions constitute breach of contract, breach of the implied covenant of good faith and fair dealing, unjust enrichment, and violation of the California Unfair Competition Law,” the filing, as published by CNET News, says.

The plaintiff for the lawsuit is Free Range Content, Inc., whose website had been using Google AdSense for advertising. Free Range claims that it noticed a $40,000 jump in its AdSense earnings in February 2014, but two days before the company was scheduled to speak with Google representatives about the issue, the company canceled its AdSense account.

The lawsuit also mentions anonymous accusations that the scheme was internal and widespread. According to the accusations, Google had an internal policy for when to allow or block certain AdSense subscribers, called the AdSense Quality Control Color Codes.

However, according to CNET, Google has already spoken out against the claims, particularly the anonymous posting. Matt Cutt, who is in charge of Google’s spam team, said the anonymous posting is “conspiracy-laden fake, from the typos to wrong terminology to untrue policies to the lack of specific names of people.”

AdSense is one of the largest moneymakers for the tech giant. Google took in roughly one-quarter of its revenue through the AdSense subscriber network, or roughly $14 billion in 2013.


For more on the tech giant Google in legal news, check out these recent articles:

Google interested in acquiring live-video-streaming service Twitch

FCC moves ahead with plan that could give some content providers priority on Internet

Take-down requests flood Google’s inbox after European court ruling

The ‘reasonable’ guide to data privacy and cybersecurity

Assistant Editor

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Zach Warren

Zach Warren is Assistant Editor of InsideCounsel magazine, where he oversees online content submissions and administers InsideCounsel's enewsletters. Zach specializes in new media and multimedia...

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