Google claims victory in ACCC court battle
Google was not misleading and deceptive in serving certain sponsored were links, the High Court has found. Photo: Joel Saget
Internet search giant Google has won its legal battle with the consumer watchdog, after the High Court overturned a ruling that the company had engaged in misleading and deceptive conduct.
The ruling ends a six-year legal battle in which the Australian Competition and Consumer Commission alleged that sponsored links using keywords for Honda, Harvey World Travel, Alpha Dog Training and Just 4X4 magazine were published by Google and led consumers to rival firms.
The case related to search results in 2006 and 2007, where a search for Honda Australia would show a paid advertisement for a Honda competitor, CarSales. The ACCC said the ads were deceptive, as they suggested CarSales was linked to Honda.
The full court of the Federal Court found Google had engaged misleading and deceptive conduct by publishing these links.
But Google appealed to the High Court which on Wednesday unanimously found in its favour.
The High Court found that Google did not create the sponsored links and ordinary reasonable users of Google would have understood that the sponsored links conveyed the representation of advertisers, and Google's conduct was not misleading or deceptive.
John Swinson, technology partner with law firm King & Wood Mallesons, said the 5-0 judgment in Google's favour, after it had previously lost 3-0 on an earlier appeal, would be welcomed by tech companies as it limits their liability for actions by users of their technology.
Google was found not liable for misleading advertisements run through AdWords despite the fact that the ads were served up by Google and created using the company's tools.
Mr Swinson said the ruling "means that technology intermediaries have to go a long way to become legally responsible".
He said this particular case concerned just Google's advertising technology and was different to other cases centring on Google's organic search results and autocomplete.
Here, Google has been found liable in some cases such as in October last year when an Australian jury found it liable for $200,000 in damages after a Melbourne man complained its search results linked him to gangland crime.
In a statement, the ACCC said it would carefully review the judgment to understand whether it had broader ramifications or implications for the enforcement of Australian consumer law.
ACCC chairman Rod Sims said it had not been disputed that the representations made by the advertisers in the sponsored links were misleading or deceptive, but the court had found that Google itself had not engaged in such conduct.
''It remains the case that all businesses involved in placing advertisements on search engines must take care not to mislead of deceive consumers,'' said Mr Sims.
A Google spokesman said: "We welcome the High Court's unanimous decision that Google cannot be held responsible for the ads that advertisers create for Google's search engine."
with Asher Moses and AFP