Google responsible for misleading search ads, Australian court says

3 Apr 2012

An Australian appeal court has ruled that Google misled customers by placing four advertisements from competitors of businesses which the user searched for on its results page.

In an appeal made by the Australian Competition and Consumer Commission (ACCC), the Australian Full Federal Court said Google’s conduct was in breach of section 52 of the Trade Practices Act 1974.

In the case, the ACCC said that when a user searches for a business in Google’s search engine, results for a competitor’s name who paid Google to host ads there would appear beside the search results, claiming this misled customers.

The case was initially filed in October 2011, however, the primary judge found that while some advertisers were being misleading, Google had not made those representations, but just communicated them from the business to the consumer.

The ACCC appealed this decision and the appeals court decided that Google did not simply repeat or pass on a statement from an advertiser but displayed a response for a search query which they decided was misleading. Google was ordered to pay a share of the costs for the trial and appeal.

“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,” said ACCC chairman Rod Sims.

“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,” Sims said.