Australian Court Ruled Google Engaged in Misleading, Deceptive AdWords Ads

A Federal Appeals Court Justice Peter Jacobson in Australia overturned the lower court's decision and found that Google "engaged in misleading and deceptive conduct in four cases."In judgment papers, Justice Jacobson along with Chief Justice Patrick Keane and Justice Bruce Lander said the primary judge "erred in failing to conclude that Google engaged in misleading […]

A Federal Appeals Court Justice Peter Jacobson in Australia overturned the lower court's decision and found that Google "engaged in misleading and deceptive conduct in four cases."

In judgment papers, Justice Jacobson along with Chief Justice Patrick Keane and Justice Bruce Lander said the primary judge "erred in failing to conclude that Google engaged in misleading and deceptive conduct in four cases".

At issue were a set of 11 Google ads, four of which were challenged on appeal. The plaintiff in the case is the Australian Competition and Consumer Commission (ACCC), a consumer protection agency, who filed suit over paid advertisements that misled consumers by showing competitors in search results for businesses. Originally, Google had not been found responsible, but, on appeal, the Full Federal Court overturned the earlier ruling.

In one of the four cases, it was revealed that between March 2006 and July 2007 Google published results on its site which included the words Honda.com.au but were actually advertisements for the CarSales website.

"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 Smith. The Court ordered Google to develop a program to comply with consumer law and to pay ACCC's court costs.

In the appeal judgment, the court noted that Google, "represented, contrary to the fact, that by clicking on the headline to the advertisement, users of the website would be taken to the Honda Australia website, and thereby engaged in conduct that was misleading or deceptive or likely to mislead or deceive".

The Court said, "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."

In a statement, Google has said it's reviewing its options:

"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 and 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."