Ads not misleading: Google wins High Court case


news Search giant Google has won a High Court case against the Australian Competition and Consumer Commission in which the regulator had alleged that Google breached the law by displaying misleading or deceptive advertisements on its search results pages.

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. The Federal Court initially found for Google, but the ACCC subsequently won an appeal against Google in a judgement of the Full Federal Court in April last year.

However, in its summary this morning (PDF), the High Court wrote: “Google did not create the sponsored links that it published or displayed. Ordinary and reasonable users of the Google search engine would have understood that the representations conveyed by the sponsored links were those of the advertisers, and would not have concluded that Google adopted or endorsed the representations.”

“Accordingly, Google did not engage in conduct that was misleading or deceptive,” the court wrote.

Among the outcomes the ACCC sought in its legal action 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. However, now Google will be able to continue with its search advertising practices, used globally.

In a statement, the ACCC said it would carefully review the judgment of the High Court to understand whether it had broader ramifications and would consider any consequences for enforcement of the Australian Consumer Law.

ACCC Chairman Rod Sims said: “The ACCC took these proceedings to clarify the law relating to advertising practices in the internet age. Specifically, we considered that providers of online content should be accountable for misleading or deceptive conduct when they have significant control over what is delivered.”

“The High Court’s decision focused only on Google’s conduct. In the facts and circumstances of this case the High Court has determined that Google did not itself engage in misleading or deceptive conduct,” Sims said. “It was not disputed in the High Court that the representations made in sponsored links by advertisers were misleading or deceptive.”

“It remains the case that all businesses involved in placing advertisements on search engines must take care not to mislead or deceive consumers,” Sims said.

Nice to know that the High Court agrees with me. In September 2011, when Google first won this case against the ACCC, I wrote:

“Sounds like a victory for common sense. Most people these days understand that Google has normal links and paid advertisements in its search results — and they’re pretty clearly delineated. But what the Trading Post was doing appeared to be quite out of line.”

In short, Google’s not to blame if advertisers place misleading search ads on its site, although those advertisers in particular might be breaching the law. I remain surprised that the ACCC pursued this action against Google; given that Google’s ad system is largely automated, it would have made more sense to proceed with legal action against groups such as the Trading Post, which have been posting questionable ads on Google. It’s the old principle of “you don’t shoot the messenger”, or, as it’s known in the Internet age, ‘safe harbour’.

Image credit: Google


  1. Definitely the right decision.

    I reckon the reason the ACCC went after Google is because if they could make it Googles problem then they wouldn’t have to go after individual businesses. It’s a bit like how AFACT want ISPs to do their work for them.

    You don’t hold Magazines or Newspapers accountable for misleading adds in their publications.

    • This theme is quite common, on both sides of the fence. People think if you’re anonymous on the Internet you can’t be held to account. It’s quite sad really.

  2. You don’t hold Magazines or Newspapers accountable for misleading adds in their publications.

    Precisely. I find it odd the way so many people have difficulty with this concept – Internet web pages with advertising links are just like paid newspaper, TV or radio ads – if someone advertises a business with a particular phone number, the medium is not going to check the claims or statements made in those ads, nor will regulatory bodies or individuals negatively affected by those ads have a reasonable expectation that the medium is liable for mistakes, omissions or outright misleading statements. You take the advertiser to court in that instance. Why would paid Internet ads be any different? Colossal fail from ACCC on this one – great use of public funds to justify their existence *shakes head*

  3. The ‘clear delineation’ is becoming hard to see with the shade of very light yellow now used by google, I sometimes have a hard time finding the gap.

    • +1.

      When there are sponsored links to the right of the search results, they are clearly defined in a seperate area and users are familiar with this and are aware they are ads.

      When sponsored links are in the same section as your search results and formatted near identically then it seems to me as if google are getting into murky waters.

  4. I would like a response why ACCC, or any other legal entity, didn’t go after the advertiser, who very obviously was behaving badly, and probably illegally (I’m no lawyer, but it looks like “passing-off” from where I sit) and would have ben a quicker and easier target.

    Any response from them, Renai?

  5. While the decision seems absolutely right, it doesn’t address the false advertising issue. And unfortunately, it is a lot easier to conduct false advertising while avoiding responsibility on the internet.

    I would like to see the people who are responsible for these ads dealt with, but can understand why the ACCC tried for the low-hanging fruit.

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