ACCC appeals Google misleading ad case

news The national competition regulator has appealed a court case which it lost against Google last month, alleging that the judgement may have not taken into account the difference between print and online media.

The Australian Competition and Consumer Commission filed the case in July 2007 in the Federal Court, alleging that Google had breached the Trade Practices Act by allowing advertisements placed by the Trading Post about car retailers in Newcastle to appear alongside results displayed by its search engine. However, Justice Nicholas ruled in the Federal Court in September that most people who used Google’s search engine would have understood that the term “sponsored links” meant the offending links were advertisements.

In addition, since the case was commenced, Google has taken a number of steps to rectify any misconception about its ads — such as changing the labelling of sponsored links to ‘Ads’ and releasing a new policy on the use of unrelated business names in the first line of text for advertisements. That policy was initially applied by Google in Australia and New Zealand, but then expanded in July 2010 globally.

However, in a new statement late yesterday, the ACCC noted it had filed an appeal in the case, arguing that it may get a different result 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.

ACCC chairman Rod Sims said the role of search engine providers as publishers of paid content needed to be closely examined in the online age.

Specifically, it is important that they are held directly accountable for misleading or deceptive paid search results when they have been closely engaged in presenting and publishing those results.” he added, noting online search advertising in Australia was estimated to be worth about $830 million a year. “It is very important that the law in this area is clarified and fully understood,” Sims said.

opinion/analysis
When the ACCC 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 believe the ACCC is barking up the wrong tree in its appeal filed yesterday — and may even not quite understand the nature of the Internet publishing platform it’s dealing with here.

Image credit: World Economic Forum, Creative Commons