Friday, 14 October 2011 07:56

ACCC goes after Google again for 'deceptive' ads

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The Australian Competition and Consumer Commission has appealed against a recent decision in the Federal Court which cleared Google from allegedly posting misleading ads of competitors of sponsored advertisers in its search results. The ads in question would claim to be those of an advertiser but when clicked take web surfers to the page of a competitor.

In September Justice John Nicholas dismissed an ACCC claim that Google was liable for advertisers using competitors' names and trademarks in sponsored links, as well as not properly distinguishing between ads and search results.

Justice Nicholas found 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. As such, Justice Nicholas ruled that Google had not breached the Trade Practices Act.

The ACCC appeal to the Full Federal Court is in respect of four advertisements. Justice Nicholas found that Google would have been unable to show that it had no reason to suspect that publication of these advertisements was a breach of the Act. The ACCC considers that the Full Court may find that Google made the representations in question and find Google directly responsible for the publication.

The ACCC takes the view that Google's key word insertion system, plus the role of Google staff, were fundamental to the representations being made.

It is significant that the previous Federal Court decisions considered by Justice Nicholas related to publishers of advertisements in traditional forms of media, such as print and television. The reasoning in those cases is not easily translated to the practices of search engine providers such as Google in publishing sponsored entries as part of search results.

'The role of search engine providers as publishers of paid content needs to be closely examined in the online age. Specifically, it is important that they are held directly accountable for misleading or deceptive paid search results when they have been closely engaged in presenting and publishing those results.' ACCC chairman Rod Sims said.

It is estimated that online search advertising in Australia through search engines such as Google, is currently worth around $830 million per year. Google is the dominant search engine provider and player in the Australian market. Online advertising grew around 20% in the last financial year.

'It is very important that the law in this area is clarified and fully understood,' Mr Sims said.


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Stan Beer

Stan Beer assists with Digital Advertising installation and monitoring of advert performance. With 35 plus years of experience working in IT and Australian technology media, Beer has published articles in most of the IT publications that have mattered, including the AFR, The Australian, SMH, The Age, as well as a multitude of trade publications. Any previous news story submissions should be director to editor@itwire.com and advertising enquires to andrew.matler@itwire.com

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