Advertisers, not Google are responsible for misleading content of sponsored links (Google Inc V ACCC)

In what will be seen globally as a significant decision for Google, other search engines and online advertising services and publishers by a respected ultimate court of appeal, the High Court of Australia yesterday unanimously upheld Google's appeal in the Australian Competition and Consumer Commission's (ACCC's) proceedings against it in relation to Google's liability for sponsored links.

Reversing a previous unanimous Full Federal Court decision, the High Court held that even though representations contained in particular sponsored links contained in Google search results pages were misleading or deceptive in contravention of section 52 of the Trade Practices Act 1974, it was the advertiser who chooses the sponsored link who is responsible for its content, not Google.

The High Court held that Google did not create the sponsored links that it published or displayed and that 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, not Google, and that Google did not adopt or endorse the misleading representations. Accordingly, Google did not engage in conduct which was misleading or deceptive.

The High Court expressly held that Google is not different in any relevant way from other intermediaries such as newspaper publishers (whether in print or online) or radio or television broadcasters who publish, display or broadcast the advertisements of others.

"The fact that provision of information via the internet will – because of the nature of the internet – necessarily involve a response to a request made by an internet user does not, without more, disturb the analogy between Google and other intermediaries. To the extent that it displays sponsored links, the Google search engine is only a means of communication between advertisers and consumers".

Since this litigation commenced, the Trade Practices Act 1974 has been superseded by the Competition and Consumer Act 2010 (CCA) and the prohibition on misleading and deceptive conduct is now found in section 18 of the Australian Consumer Law, which has effect under the CCA. However, the provisions are the same for all relevant purposes and the result would be the same today.

It is important for advertisers and marketers to be aware that while Google itself did not engage in misleading or deceptive conduct, the advertisers in this case had either previously admitted or been found by the primary judge to have engaged in misleading or deceptive conduct by placing advertisements using Google's AdWords program to be displayed as sponsored links when one of their competitor's brands was searched by a user of Google's search engine.

The ACCC has recently also issued Guidelines for the use of Social Media, which we discuss here.

Please don't hesitate to contact Robert Gregory or any member of Maddocks Information, Communications and Technology or Advertising, Brands and Marketing teams if you would like to discuss the impacts of this case on your operations, or any related matters

Robert Gregory
T: +61 3 9240 0770

Canberra | Melbourne | Sydney