Google responsible for misleading ads - Australian court

Google is no mere conduit, but responsible for misleading ads that run on it search engine, the Federal Court of Appeal in Sydney ruled yesterday.

The decision over-ruled an lower court decision, and ordered the US-based search giant to put compliance procedures in place to avoid deceptive ads in future.

The ruling followed an action brought by the Australian Competition and Consumer Commission (ACCC) over a series search ads placed on Google in 2007.

People who used Google to search for Honda, Harvey World Travel, Alpha Dog Training and Just 4X4 Magazine were served paid search ads that led to rival websites.

The central issue for determination on appeal was whether the primary judge erred in finding that Google did not “make” the representations contained in the four advertisements that were the subject of the 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," ACCC chairman Mr Rod Sims said in a statement.

"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 user asks a question of Google and obtains Google's response," a three-judge appeal panel wrote in a 49-page ruling.

"Several features of the overall process indicate that Google engages in misleading conduct."

Google responds
A spokesman for Google's Australia-New Zealand office, based in Sydney, told NBR:

“We are disappointed by the Federal Court’s decision that Google should be responsible for the content of four particular ads on its platform.

"Google AdWords is an ads hosting platform, and we believe that advertisers should be responsible for the ads they create on the AdWords platform.

"We’re committed to providing an advertising platform that benefits both advertisers and users.

"We investigate complaints about violations of our policies terms and conditions, and if we are notified of an ad violating our terms and conditions we will remove it.

"We are currently reviewing our options in light of the court’s decision," he said.

"This decision doesn’t overturn the initial Federal Court’s decision that we distinguish sufficiently between organic search results and ads."

Commerce Commission - all good in NZ
A Commerce Commisson spokeswoman told NBR, "We understand, from the ACCC that there’s likely to be no ongoing similar conduct in New Zealand. Consequently we have no current plans to investigate here.
However we note that the precedent set will be likely to be relevant to New Zealand and that will be useful in clarifying the potential liability of search engine providers."

Commerce Commission chairman Mark Berry is an associate member of the ACCC under a cross-appointment programme.