SAN JOSE, Calif. (CN) — Claims that Google broke a promise to early users of what is now Google Workforce by requiring them to start paying for the once-free service appear destined for a long slog.
Real estate management company Stratford filed a class action claiming Google broke its promise to early testers of its Workspace suite that the service would always be free to them. The company says it signed up Workspace — once called Google Apps and G Suite — in 2008 when it was offered as a free alternative to Microsoft Office, but says it was "stunned in 2022" when Google said it would begin charging for Workspace usage.
Stratford dropped its case, but a nationwide class of plaintiffs including California proprietor Steve Rabin and Wisconsin resident Ian Graves moved forward. They all claim they used Google Apps for their business because of the promotion, and were still receiving free Google Workspace service as of Jan. 1, 2022.
Their claims include breach of contract, breach of the implied covenant, unjust enrichment and violation of unfair competition law.
Google argues it gave legacy users months of prior notice before ending the free program and offered a discount for paid subscriptions to Workspace, which plaintiffs accepted.
In the motion to dismiss filed in December 2022, Google argues the plaintiffs have an “absurd theory” that the company had to provide free services for life, and they fail to identify any marketing statement or contract term showing such a promise.
The company also says the plaintiffs signed agreements that include giving Google the right to terminate those agreements or stop offering the service “at any time, for any reason.” To sign up for Workspace, plaintiffs had to enter a new contract with Google.
“Plaintiffs cannot impose an obligation on Google to provide free business applications for life under any theory, when they expressly agreed that Google could end the free services and terminate the agreements at any time," Google said.
In federal court in San Jose on Thursday, attorneys for Google urged U.S. District Judge Beth Labson Freeman — a Barack Obama appointee — to dismiss the class action with prejudice because any attempt to cure the claims would be “futile.”
“The termination provision in the contracts is key here, and really the other claims rise and fall with that provision,” attorney Kristine Forderer said.
Attorney Christopher Andrews added the plaintiffs did not claim bad faith and according to a case they are relying on, selective enforcement of a contract is not bad faith.
But plaintiffs' Daniel Seltz said Google did not terminate the service as it claimed, it only required that it be paid for — an assessment the judge said she agreed with.
“Google hasn’t pointed to anything where it actually canceled the agreements,” Seltz said, adding all the company did was email the plaintiffs that their service must be paid for, despite the promise that it would always be free for them.
“You’re saying it grew into a forever contract? I don’t read the law that way,” Freeman said, noting Google’s agreement says a change can supersede any previous agreements.
Seltz said that is why the plaintiffs want an injunction to prevent Google from continuing to engage in this conduct, and to let the case advance to see if making Google pay damages is warranted.
Forderer argued emails sent to the plaintiffs said the free program was ending and they could start a new subscription, and that Google actually terminated the agreements. She said the plaintiffs had conveniently hidden the fact that they signed up to pay.
“I don’t think it’s fair for them to be allowed to omit this very important fact, and allow the case to proceed with this fatal flaw going forward just because they don’t want to allege it,” Forderer said.
Freeman said she will soon rule on the motion, but said the case has so many issues that “I don’t even know where to begin.”
“It actually seems to me this is an all or nothing motion,” the judge said. “I don’t see this as a case where amendment is really necessary, we’ve got some big issues to deal with here.”
She opened the case for discovery and ordered the parties to enter mediation by Oct. 31. The case could continue into 2025.
“I think it’s clear from the discussion today, just looking forward, this is a difficult case for plaintiffs,” the judge added.
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