Google sued over advertising program

Updated 2:30 p.m. PDT with comment from the plaintiff lawyer.

A lawsuit filed Tuesday in federal court accuses Google of deceiving its customers into paying for ads they didn't expressly request.

The lawsuit, which seeks class action status, was filed by the firm of Kabateck Brown Kellner in U.S. District Court in San Jose, Calif., on behalf of David Almeida, a Massachusetts-based private investigator who enrolled in Google AdWords in November 2006.

When participating in Google's online auction-based advertising system, customers specify what they would be willing to pay per-click for words or phrases that will trigger ads displayed on Google's search site, as part of Google AdWords. They are also given the option of bidding for ads that appear on third-party Web sites, also called Google's "content network," which is part of Google AdSense.

When customers do not bid for ads on third-party sites, Google places ads there anyway and automatically charges customers the amount they specified for ads on Google.com, the lawsuit says.

On the system, customers see two blank boxes, one for typing in a bid for ads on Google.com and another one, marked "optional," for putting ads on content network sites. Sophisticated search engine marketers know to put a "0" in the box for the content network AdSense sites if they don't want ads there, says Brian Kabateck, lead counsel on the case. "For most people, if you see a box and leave it blank, you think you're not going to be charged," he says.

Google does not inform its advertisers that if they leave the box next to the content bid blank, Google will use the advertiser's bid for clicks occurring on the content network, the lawsuit says. There is no option to opt out of content ads during the process, according to the document.

"Ads on third-party sites are widely acknowledged to be far less effective (and therefore less valuable to the advertiser) than ads on Google.com," a statement from Los Angeles-based Kabateck Brown Kellner says. "Google, of course, still profits greatly from these ads."

A Google spokesman said: "We have not been served with the complaint and will have no comment until we have the chance to review it."

Kabateck recently won a multimillion-dollar click fraud settlement from Yahoo and was part of a $90 million click fraud settlement from Google on behalf of advertisers who sued the search companies claiming they were charged for clicks on ads that were fraudulent.