May 2012

Sponsored links and misleading & deceptive conduct: Google - not just a conduit

The Full Federal Court recently considered the conduct of Google, as a publisher of advertisements which were misleading and deceptive in ACCC v Google Inc [2012] FCAFC 49. 

The issue considered was whether Google, in publishing sponsored links in response to searches undertaken by users of its site, by its conduct adopted the content of the sponsored links which were misleading and deceptive or whether Google was merely passing the information on without any responsibility, thereby being a mere conduit. 

Search Results & Sponsored Links

Advertisers can pay for their advertisements to appear on the Google website in response to various keywords searched. Search results can be displayed on the page as “sponsored links” (often in highlighted text), sitting above “true results” being generated by the same keyword searches (known as the organic results) which appear in order of relevance to the search, based on a complex algorithm developed by Google.

Sponsored links are enhanced to be more visible and thereby allow user traffic to be easily directed to advertisers’ web pages.   The keywords are selected by the advertiser with some assistance provided by Google.

The Case

The case involved four advertisers who had paid for their advertisement to appear as sponsored links above the organic results. 

One example which was the subject of the dispute involved a competitor of Harvey World Travel having their advertisement appear in response to a Google search of the words “Harvey World Travel”

The sponsored link results that were displayed by Google, contained the search term in a prominent headline replicating the terms of the search enquiry.  When the searcher clicked on the sponsored link they were taken to the competitor’s website, in this case STA Travel. 

The Decision

The Court found that by enabling an advertiser to use a competitor’s name to draw consumers to the advertiser’s own website, Google was not merely a conduit but was itself engaging in misleading and deceptive conduct in contravention of section 52 of the Trade Practices Act 1974 (now replaced by section 18 of the Australian Consumer Law). 

In reaching this conclusion, the Court identified that the conduct in question had to be considered as a whole, having regarding to all of the circumstances, to determine whether there was merely the passing on of information, or adoption or endorsement by the publisher. 

In the circumstances under review:

  1. Google controlled the results generated by the search;

  2. the way in which the results appeared allowed advertisers to target their competitors by the use of keywords which then appeared in Google’s web page; and

  3. the results displayed were produced by Google’s search engine and were Google’s response to the search.

The falsity of the conduct was that the advertiser’s URL (e.g. STA Travel) misrepresented a connection or affiliation between the searched term identifying the competitor (e.g. Harvey World Travel) and the URL of the advertiser.  It was Google that was responding to the query and providing the URL.

In respect of Harvey World Travel, the Court took the view that Google told the searcher that the URL provided was the contact address for information about Harvey World Travel, when it was not.  Google’s technology created the displayed result and it was not merely passing on a statement by an advertiser. 

Implications

This decision highlights the risks involved for businesses which allow for advertisements to be placed on a website or which operate a search engine. 

Caution needs to be taken to ensure a website upon which an advertisement is placed or the results of a search undertaken, do not result in the adoption or endorsement of the content of the advertisement rather than simply the passing on of the information.

If you currently advertise goods and services online, periodically review your online listings and also what results and advertisements appear when you enter various keywords associated with your company, goods or services, via any of the available search engines.

 

This publication is intended as a source of information only. No reader should act on any matter without first obtaining professional advice. 
Principal author: Denise Wright

 

 

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