ACCC appeals Google ads ruling

The Australian Competition and Consumer Commission (ACCC) has announced that it has appealed the Federal Court ruling in Google's favour over advertising in search results.

(My trusty gavel image by Brian Turner, CC2.0)

The case centred around sponsored links in Google search results by online trading company Trading Post. The competition watchdog alleged that because the headline of an advertisement link in Google search results often referred to the business name that a person was searching for alone, and then redirected to the Trading Post website, which had no affiliation with the real business, Google and Trading Post were engaged in deceptive conduct.

The ACCC also alleged that Google was misleading consumers by not making it clear that "sponsored links" were advertisements.

In his ruling in September, Justice John Nicholas found that while the Trading Post had been misleading in its conduct regarding the advertisements, Google was not engaged in deceptive conduct, as it had merely been the messenger between the advertiser and the consumer.

"Google merely communicated what Trading Post represented without adopting or endorsing any of it," Nicholas said.

Yesterday, the ACCC announced that it had filed an appeal on the ruling, stating that the commission believes that a Full Court may find that Google would be responsible for the publication of the advertisements. The commission contends that Google's keyword insertion system and the Google staff involved in that process were "fundamental to the representations being made".

ACCC chair Rod Sims said that it would be important for the Full Court to assess the role of search engines as publishers of paid content.

"Specifically, it is important that they are held directly accountable for misleading or deceptive paid search results when they have been closely engaged in presenting and publishing those results." Sims said in a statement, pointing to the fact that search engine advertising is worth around $830 million per year.

"It is very important that the law in this area is clarified and fully understood," Sims said.

Google confirmed it had received news of the appeal and was currently reviewing it.

Jackie O'Brien, partner with law firm Norton Rose, said in a briefing on the original ruling that the judgment by Nicholas raised some interesting questions about whether representation is misleading or deceptive if a person had never used that search engine before, and was therefore unaware of the difference between advertisements and search results.

"The finding as to misleading or deceptive conduct would be no doubt different if a search engine was new to the market at the relevant time, and the proportion of first-time users constituted a large number of the relevant section of the public," she said.