Google Breached Consumer Protection Laws

Google Breached Consumer Protection Laws

[]: In a decision that could have wide reaching consequences for Google, the Full Federal Court of Australia has declared that the dominant search giant has broken the law by publishing misleading or deceptive advertisements in response to search queries. The decision follows an appeal in October 2011 by the Australian Competition and Consumer Commission against an earlier judgement which Google won.

Yesterday, the Full Court declared that Google, by publishing four advertisements that were the subject of the ACCC’s appeal on result pages of the Google Australia website, 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 advertisements in question involved the use of the names of competitors as keywords in search results so that a web user searching for a particular brand by name would be presented with an ad from a competitor that deceived the web user into visiting the competitor’s site.

In the initial case, the ACCC alleged that Google had engaged in misleading or deceptive conduct by publishing eleven 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 initial case was dismissed by Justice Nicholas of the Federal Court with the judge finding 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.

However, the ACCC appealed the primary judge’s decision in relation to four of the eleven advertisements basing the appeal on whether the primary judge erred in finding that Google did not “make” the representations contained in four advertisements from the companies Alpha Dog Training, Honda, Harvey World Travel, and Just 4X4 Magazine. Web users searching for those companies by name were presented with competitor’s ads.

“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. As the Full Court said this was likely to mislead or deceive a consumer searching for information on the competitor,” ACCC chairman Rod Sims said.

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 a statement 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.”

“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,” Mr 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,” Mr Sims said.

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

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