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