Someone claiming to be an ex-Google employee suggested in April that the company conspires to steal revenues from its partners who host Google-provided ads on their websites. Now, a prominent Seattle-based lawyer who used to work for Microsoft is using those accusations as the basis for a nationwide class action lawsuit against Google.
If you think there may be something rotten in Denmark (or Seattle), you’re probably right. The new lawsuit over ads, along with another improbable class action filed against Google last month, suggests that someone is running what amounts to a legal smear campaign. (Update: Microsoft has denied it is involved. See below)
A conspiracy within a conspiracy
First, some details about the new lawsuit: On Tuesday, a company called Re-Post filed a class action complaint (embedded below) in San Francisco on behalf of other websites that are allegedly getting shortchanged by Google. According to Re-Post, which provides licensed news content to other websites, Google abruptly closed its AdSense account in March of 2014, keeping around $11,000 owed to Re-Post.
The complaint suggests this is part of a pattern: Google conspires to cheat those who use its AdSense program, which lets websites host ads provided by Google and share in the profits. Under the alleged scheme, Google waits until a few days before an AdSense partner is due to receive a quarterly pay-out, and then cites a policy violation in order to terminate their account. Terminating an account in this way lets Google keep all the money.
Word of this Google conspiracy first surfaced in April via an anonymous post on Pastebin, a site popular with programmers. The accusation came from someone claiming to be a former Google employee, who claimed to have evidence that the scheme to defraud AdSense partners was well-known within the company.
The allegations were greeted with skepticism by readers of Hacker News, a tech news and discussion board, where influential Google executive Matt Cutts also weighed in to debunk them. In response, the anonymous “employee” wrote that he or she was willing to make the alleged evidence public — but only if lawyers didn’t first file a class action case against Google:
That is why I have chosen to only release [the evidence] to the legal representatives of the class action lawsuit against Google in regards to AdSense … If several months go by and no class action lawsuit manifests, then I will have to selectively release a few key pieces of evidence to the public at large.
Well, the person got their wish. The class action has been filed, and the lawyer who did so is no two-bit pettifogger.
Steve the super-lawyer
Steve Berman is a nationally renowned attorney who recently won a price-fixing case, along with the Justice Department and state governments, worth hundreds of millions of dollars against book publishers and Apple. More recently, Berman, who once defended Microsoft against antitrust claims, has turned his attention to Google.
In early May, Berman’s law firm, Hagens Berman, filed a sprawling class action case that accuses Google of creating an illegal monopoly in the mobile search market. Now, he is also leading the legal charge over the alleged AdSense scheme.
All of this looks odd given that, unlike the Apple case, neither of the Google complaints look very strong. The monopoly case is based on an unusual legal theory, and looks even weaker given that the U.S. government recently came up dry in its own antitrust investigation into Google. Meanwhile, the new AdSense appears even more flimsy: it hangs largely on the accusations of an anonymous internet writer and, as others have noted, the alleged conspiracy would go against Google’s own business interest.
I asked Berman why he was pursuing what appears to be a long-shot case based on the “employee” allegation, and he responded by email:
“The plaintiff allegations and others are solid [and] we don’t need the employee.”
Google, meanwhile, declined to comment on the AdSense case.
A possible plot against Google?
Critics of Google can find plenty to gnash their teeth about: from its repeated privacy flubs to its illegal pharma ads to its growing influence in Washington. But a lawsuit claiming that Google is blatantly cheating and shutting down its AdSense partners, which contribute a good part of Google’s revenue, just doesn’t make much sense.
Unless, that is, the AdSense class action isn’t really about winning the lawsuit — but about throwing legal mud on Google.
In any case you’re unfamiliar with the dark arts of tech PR, Microsoft has a history of running cloak-and-dagger legal and PR campaigns against its bitter rival. These include ties to a “Fair search” legal campaign, funding sock puppets in the debate over patents, and hiring former Hillary Clinton consigliere Mark Penn to run a “Scroogled” campaign.
Reports last month say the Scroogled campaign is finally over but, for anyone who took this as a sign that Microsoft now wants to play nice, don’t get your hopes up. The Berman lawsuits suggest that the company has just found a new way to continue its long-running dirty tricks campaign against Google.
Update: In an email statement, a Microsoft spokesperson said, “We had nothing to do with this filing. In fact, we didn’t know about it until we read about it in the news.”
Given Microsoft’s outright denial, my initial suspicion may be off the mark. Given the weakness of the legal cases, however, I maintain my assertion that there is more to these cases than meets the eye.
Here’s the AdSense complaint (I’ve underlined some of the key parts):