Google Inc (GOOGL) Faces Lawsuit Over AdSense Fraud

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A lawsuit was filed against Google Inc (NASDAQ:GOOGL) (NASDAQ:GOOG) on Tuesday, where it was accused of engaging in a widespread fraudulent activity that involved cancellation of AdSense accounts the moment they became due for payment. Of the total Google’s revenue, quarter is accounted for by AdSense, who is Google’s major advertiser partner network. Google’s revenue in 2013 was $57.86 billion.

Details of the case

Class action status is being seeked by the lawsuit so that all the AdSense users based in US, whose accounts were either terminated or disabled with the refusal for the payment of final dues by Google, could be represented.

AdSense was being used for the display of ads by Free Range Content, who is the owner of based in California and on its behalf, Hagens Berman Sobol Shapiro filed the case. The AdSense earnings in the month of February by Free Range Content allegedly saw an unusual rise of $40,000. This anomaly was reported to Google Inc (NASDAQ:GOOGL) (NASDAQ:GOOG) by the company and a call was scheduled on March 6 with a representative from AdSense to discuss the issue, and two days before the call could take place, their account was disabled by Google, and they also refused to have any further contact with Free Range Content.

Anonymous claim earlier

Google has been recently accused anonymously that in 2009 it had developed a fraud scheme under which it tried to protect itself from paying the money that it owed to the publishers. The anonymous accusation at the end of April alleged that Google Inc (NASDAQ:GOOGL) (NASDAQ:GOOG) had an internal policy that included a color-coded plan detailing when to block or approve different kinds of AdSense subscribers, called AdSense Quality Control Color Codes.

“We were told to begin banning accounts that were close to their payout period (which is why account bans never occur immediately after a payout). The purpose was to get that money owed to publishers back to Google AdSense, while having already served up the ads to the public,” read the accusation, which had been posted on PasteBin and reposted Reddit.

Matt Cutts, the executive in charge of Google’s Web spam team, decried the claims as a “conspiracy-laden fake, from the typos to wrong terminology to untrue policies to the lack of specific names of people.”