ACCC Wins Appeal Over Google Verdict

  • Judge initially found for Google
  • Appeal made by ACCC
  • Four ads were misleading

Australia’s Full Federal Court unanimously upheld the Australian Competition and Consumer Commission's (ACCC) appeal filed in October 2011 against Google.

Today's judgment follows an appeal filed by the ACCC in October 2011 against the decision by Justice Nicholas of the Federal Court in relation to certain advertisements appearing on Google's website.

At first instance, the ACCC alleged that Google had engaged in misleading or deceptive conduct by publishing 11 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 ACCC alleged that the advertisements contained representations that, in summary, by clicking on the headline users would find information as to the competitor's business.

The primary judge found that although a number of the advertisements were misleading or deceptive, Google had not made those representations. Google merely communicated representations made by the advertiser. As such, Justice Nicholas ruled that Google had not breached the Act.

The ACCC disagreed with that decision and appealed in relation to four of the eleven advertisements. The central issue on appeal was whether the original judge erred in finding that Google did not "make" the representations contained in the four advertisements the subject of the appeal.

With respect to those four advertisements, the judge found that if Google had made the representations The Full Court declared that Google, by publishing the four advertisements, engaged in conduct that was misleading or deceptive, or likely to mislead or deceive, in breach of section 52 of the Trade Practices Act 1974.

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

“Google's conduct involved the use by an advertiser of a competitors name as a keyword triggering an advertisement for the advertiser with a matching headline,” says ACCC chairman Rod Sims. “As the Full Court said this was likely to mislead or deceive a consumer searching for information on the competitor.”

The central issue for determination on appeal was whether the primary judge erred in finding that Google did not "make" the representations contained in the four advertisements that were the subject of the appeal.

“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,"  Sims said. "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.”

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 astatement by an advertiser which is passed on for what it is worth.”

The Full Court also stated that "the enquiry is made of Google and it is Google's response which is misleading… Although the key words are selected by the advertiser, perhaps with input by Google, what is critical to the process is the triggering of the link by Google using its algorithms."

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