I believe that Google allows advertisers to set various limits on how much they will pay, both for a single click and for total amounts that an advertiser wants to spend. If so, then I don't see what leg these advertisers really have to stand on in suing Google.Well, if I have a website and I set a quota of $5.00 in payouts per day on a keyword that's going for $.10 per click, then my competitor could click on the ad 50 times and my ad would not be displayed anywhere on Google for the rest of the day.
Indeed, you are correct.
After reading another post that brought up the same point, though, it still didn't seem to me that Google is responsible for such behavior. Google offers such limits, which protect you from suffering too much loss; or you can elect to establish larger limits that might be damaging to your business.
While I believe that Google tries in good faith to limit the number of identifiable bad clicks (which should be easy enough for utterly amateurish behavior), I don't see how it could be Google's responsibility to do such perfectly since I don't believe that there is a perfect way to identify such bad clicks. I still think the advertiser has to take the risk that some of this goes on.