ACCC succeeds in Full Federal Court decision against Google


In a recent decision handed down by the Full Federal Court of Australia, Google Inc. (“Google”) was found to have engaged in conduct that was misleading or deceptive, or likely to mislead or deceive, by publishing certain advertisements on its Google Australia website.

The case concerned four separate advertisements which were generated using Google’s AdWords search engine advertising operation. The advertisements were generated as a result of an advertiser selecting a competitor’s business name, product name or web address as a keyword, which triggered an advertisement for the advertiser containing a headline referring to the competitor and a link to the advertiser’s website.

One such example was the the Harvey World Travel advertisements which contained a link to STA Travel’s website (STA Travel being a major competitor of Harvey World Travel) under the headline “Harvey World Travel”. The advertisements were created as a result of STA Travel (a Google AdWords customer) selecting the keywords “Harvey World” and “Harvey World Travel” as part of its AdWords advertising campaign with Google.

Consistent with the terms of its AdWord’s Program, Google sought to argue that the advertisers were solely responsible for all advertising, keywords and URLs. However, the Full Federal Court found that the misleading or deceptive conduct was that of Google as a principal and not as a mere intermediary, as Google was responding to the query rather than merely passing on the URL as a statement made by the advertiser.

Google was ordered to pay the ACCC’s costs relating to the appeal and to put in place a consumer law compliance programme with detailed review and reporting requirements.

Although Google has not yet announced that it will appeal the decision, given the implications for Google’s lucrative business, an application to the High Court for special leave to appeal the decision seems likely.

The decision serves as a warning to businesses using online advertising provided by search engine operators, particularly where key words must be selected in order to trigger the advertisement.

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