• Great articles on other sites
  • RSS Great articles on other sites

  • News - Written by on Thursday, April 5, 2012 8:54 - 6 Comments

    Misleading ads: ACCC wins appeal against Google

    news The Full Federal Court of Australia has ruled that Google breached the law by displaying misleading or deceptive advertisements on its search results pages. The decision follows an appeal by the Australian Competition and Consumer Commission (ACCC), following an earlier decision in favour of Google.

    The ACCC had first filed the case in July 2007 in the Federal Court alleging that Google had engaged in misleading or deceptive conduct by publishing eleven advertisements on Google’s search results page. The headline of each of the advertisements in question comprised a business name, product name or web address of a competitor’s business not sponsored, affiliated or associated with the particular advertiser. When a user clicked the headline of the advertisement, he or she was taken to the advertiser’s website.

    Among the outcomes the ACCC sought at the time were injunctions which would have restrained Google from publishing sponsored links representing organisations which did not exist — such as the Trading Post’s move to place advertisements for “Kloster Ford” and “Charlestown Toyota”, both of which were names of car retailers in Newcastle.

    Sitting Justice Antony Nicholas had last September ruled that most people who used Google’s search engine would have understood that the term “sponsored links” meant the offending links were advertisements. However, the ACCC appealed the case in October 2011, alleging that the judgement may not have taken into account the difference between print and online media; and arguing that it may get a different judgement from the full bench of the Federal Court.

    “It is significant that the previous Federal Court decisions considered by Justice Nicholas related to publishers of advertisements in traditional forms of media, such as print and television. The reasoning in those cases is not easily translated to the practices of search engine providers such as Google in publishing sponsored entries as part of search results,” the regulator said in a statement after filing the appeal last September.

    “Google’s conduct involved the use by an advertiser of a competitor’s name as a keyword triggering an advertisement for the advertiser with a matching headline. As the Full Court said this was likely to mislead or deceive a consumer searching for information on the competitor,” ACCC chairman Rod Sims said in a statement. “The ACCC brought this appeal because it raises very important issues as to the role of search engine providers as publishers of paid content in the online age.”

    “This is an important outcome because it makes it clear that Google and other search engine providers which use similar technology to Google will be directly accountable for misleading or deceptive paid search results,” Sims added.

    In upholding the ACCC’s appeal, the Full Court concluded that “here Google created the message which it presents. Google’s search engine calls up and displays the response to the user’s query. It is Google’s technology which creates that which is displayed. Google did not merely repeat or pass on a statement by the advertiser: what is displayed in response to the user’s search query is not the equivalent of Google saying here is a statement by an advertiser which is passed on for what it is worth.”

    The Full Court also ordered Google to put in place a consumer law compliance programme and pay the ACCC’s costs of the appeal.

    When the ACCC initially lost its case against Google, I wrote that the judgement sounded like a victory for common sense, given that most people these days understand that Google has normal links and paid advertisements in its search results, and that they are pretty clearly delineated. Consequently, I believed the ACCC was barking up the wrong tree in its appeal — and may even not quite understand the nature of the Internet publishing platform it’s dealing with here.

    I still believe the ACCC has far, far better things to spend its time on than targeting Google’s advertising functionality, a service which I have heard few (if any) people complain about over the past decade or so that it’s been available. However, this week’s judgement of the full Federal Court does legitimise the ACCC’s actions. Perhaps Google does have to answer further for its actions. It will be interesting to see what impact the new rules will have on the search giant’s behaviour.

    Opinion/analysis by Renai LeMay

    submit to reddit


    You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.

    1. SMEMatt
      Posted 05/04/2012 at 10:31 am | Permalink | Reply

      The particular search that served the ads might be determined by Google but the content of the Ad is in the hands of and subject to the approval of the advertiser.

      Now if the Ad appeared in the news paper would the ACCC go after the paper or the advertiser?

      • SMEMatt
        Posted 05/04/2012 at 10:35 am | Permalink | Reply

        Having said the above Google doesn’t allow you to advertise on registered trademarks you don’t own.

      • timtim
        Posted 05/04/2012 at 12:16 pm | Permalink | Reply

        I was just wondering if TV networks would find themselves in similar territory to Google if a third party ran misleading ads on their platform.

    2. Mike
      Posted 05/04/2012 at 10:48 am | Permalink | Reply

      This article might lend a little more light to the average Joe Layperson as to why the ACCC is wrong, nice easy to understand explanation – http://blog.aukihenry.com/2012/04/when-lawmakers-lose-touch-google-vs.html

    3. Denis
      Posted 06/04/2012 at 5:46 pm | Permalink | Reply


      Google disallows it because it got tried — and lost — in Europe back when they allowed precisely that. They lost for mostly similar reasons as they did here, too: it’s misleading.


      I found his analogies far from compelling. And they come with little to no arguments.

      A better analogy might have been a billboard. It reads: “Burger King next right!” You turn 50m later. Dead-end. Facing you, a shoddy-looking taco place. Should the billboard company have be held liable for posting this misleading ad?

      In the initial ruling, the answer seems to be: sue the burger place. The billboard is a mere venue. (This is a weird position, btw. In more than a few countries, laws hold a publisher liable for anything it prints — including billboard ads and blog comment posts.)

      In the new one, it seems to be: sue the billboard company. Its intent, and its viewer’s intent, make it more than a simple venue. Continuing the analogy, it’s one thing to rent static billboard space. It’s another to be the goto place for a directions, to be asked for “Burger King”, and to mislead whoever asks to whichever shoddy taco place that gave you the highest kickback. Or so it seems, anyway…

    4. Posted 07/04/2012 at 6:42 pm | Permalink | Reply

      Just a note about why Google was being sued: Google’s staff (“creative maximisers”) were in some cases actually suggesting the offending keywords to the companies in question, but more importantly, what was impugned was the way Google was advertising, not so much the content that it advertised. That is to say, it wasn’t being sued as a publisher, or in the way you may imagine a billboard company being sued for the ads it hosts.

      If you read the case, you’ll see that the ACCC *aren’t* idiots because they argue that ads can mislead and deceive. One thing they argued was that the way the ads are displayed is capable of being misleading and deceiving – which is distinct from the claim that they were deceived or misled by the ads themselves. Their argument flows from the idea that just because people like you and I are internet savvy, it does not mean that *everyone* is internet savvy – some of our parents, for example, may not be the most web-literate people. The legislation is not there to protect a wider class of people than just us, who may have figured out that sponsored links were ads. I will admit I think they could have used better claims than they did. I would have argued that sponsored links do not point out who is sponsoring whom, and the fact that most people even now can’t distinguish between right hand column ads and ads appearing above the organic results, the fact that even in 2008, around 60% of internet users surveyed in the US couldn’t distinguish between organic results and ads and so on.

      It’s an interesting case, but because of the tricksiness of its facts, it is prone to being misconstrued when discussed in a public forum.

      Regarding SMEMatt’s comment that Google doesn’t allow you to advertise using trademarks you don’t own – it’s worth noting this is a reactive measure. It works on a reporting basis – so I could use your trademarked word as an adwords keyword until such time as you found out about it and provided evidence to Google. Then I would be stopped from using it, but you’d have to sue me if you wanted anything punitive to come out of it.

    Leave a Comment


  • Get our 'Best of the Week' newsletter on Fridays

    Just the most important stories, one email a week.

    Email address:

    Follow us on social media

    Use your RSS reader to subscribe to our articles feed or to our comments feed.

  • Most Popular Content

  • Enterprise IT stories

    • Super funds close to dumping $250m IT revamp facepalm2

      If you have even a skin deep awareness of the structure of Australia’s superannuation industry, you’ll be aware that much of the underlying infrastructure used by many of the nation’s major funds is provided by a centralised group, Superpartners. One of the group’s main projects in recent years has been to dramatically update and modernise its IT platform — its version of a core banking platform overhaul. Unfortunately, the $250 million project has not precisely been going well.

    • Qld’s Grant joins analyst firm IBRS peter-grant

      This week it emerged that Peter Grant, the two-time former Queensland Whole of Government CIO (pictured), has joined well-regarded analyst firm Intelligent Business Research Services (IBRS). We’ve long had a high regard for IBRS, and so it’s fantastic to see such an experienced executive join its ranks.

    • Westpac dumps desk phones for Samsung Android mobiles samsung-galaxy-ace-3

      The era of troublesome desk phones tied to physical locations is gradually coming to an end in many workplaces, with mobile phones becoming increasingly popular as organisations’ main method of voice telecommunications. But some groups are more advanced than others when it comes to adoption of the trend. One of those is Westpac.

    • Ministers’ cloud approval lasted just a year reverse

      Remember how twelve months ago, the Federal Government released a new cloud computing security and privacy directive which required departments and agencies to explicitly acquire the approval of the Attorney-General and the relevant portfolio minister before government data containing private information could be stored in offshore facilities? Remember how the policy was strongly criticised by Microsoft, Government CIOs and Delimiter? Well, it looks like the policy is about to be reversed.

    • WA Govt can’t fund school IT upgrades oops key

      In news from The Department of Disturbing Facts, iTNews revealed late last week that Western Australia’s Department of Education has run out of money halfway through the deployment of new fundamental IT infrastructure to the state’s schools.

    • Turnbull outlines Govt ICT vision turnbull-5

      Communications Minister Malcolm Turnbull has published an extensive article arguing that the Federal Government needed to do a better job of connecting with Australians via digital channels and that public sector IT projects needn’t cost the huge amounts that some have in the past.

    • NZ Govt pushes hard into cloud zealand

      New Zealand’s national Government announced a whole of government contract this morning for what it terms ‘Office Productivity as a Service’ services. This includes email and calendaring services, as well as file-sharing, mobility, instant messaging and collaboration services. The contract complements two existing contracts — Desktop as a Service and Enterprise Content Management as a Service.

    • CommBank reveals Harte’s replacement whiteing

      The Commonwealth Bank of Australia has promoted an internal executive who joined the bank in September after a lengthy career at petroleum giant VP and IT services group Accenture to replace its outgoing chief information officer Michael Harte, who announced in early May that he would leave the bank.

    • Jeff Smith quits Suncorp for IBM jeffsmith4

      Second-tier Australian bank and financial services group Suncorp today announced that its long-serving top technology executive Jeff Smith would leave to take up a senior role with IBM in the United States, in an announcement which marks the end of an era for the nation’s banking IT sector.

    • Small business missing the mobile, social, cloud revolution iphone-stock

      Most companies that live and breathe the online revolution are not tech startups, but smart smaller firms that use online tools to run their core business better: to cut costs, reach customers and suppliers, innovate and get more control. Many others, however, are falling behind, according to a new Grattan Institute discussion paper.

  • Blog, Enterprise IT - Jul 5, 2014 13:53 - 0 Comments

    Super funds close to dumping $250m IT revamp

    More In Enterprise IT

    Blog, Telecommunications - Jul 5, 2014 12:12 - 0 Comments

    What should the ACCC’s role be in guiding infrastructure spending?

    More In Telecommunications

    Analysis, Industry, Internet - Jun 23, 2014 10:33 - 0 Comments

    ‘Google Schmoogle’ – how Yellow Pages got it so wrong

    More In Industry

    Blog, Digital Rights - Jun 30, 2014 22:24 - 0 Comments

    Will Netflix launch in Australia, or not?

    More In Digital Rights