Google wins landmark advertising case in Australia

Wed Feb 6, 2013 2:30am EST
 

By James Grubel

CANBERRA (Reuters) - Google Inc won a landmark court case on Wednesday when Australia's High Court ruled that it had not engaged in misleading behavior with its sponsored links and that it was not responsible for messages conveyed by paid advertisers.

The ruling helps Internet providers and search engines argue that they are not publishers, but simply carriers of information provided by third parties.

While the judgment applies only in Australia, the ruling will be closely watched around the world and could be cited as a precedent in the event of similar cases arising in the rapidly evolving area of law.

"Others will definitely be looking at this ruling. Google is a worldwide business. This is something of a first, and it does add some clarity for the industry," the head of Australia's Internet Industry Association, Peter Lee, told Reuters.

The finding ends a six-year legal battle between Google and Australia's consumer watchdog, the Australian Competition and Consumer Commission (ACCC), which accused Google of engaging in misleading and deceptive conduct over paid advertisements.

The ACCC based its case on search results in 2006 and 2007, where a search for Honda Australia would show a paid advertisement for a Honda competitor, CarSales. The ACCC said the ads were deceptive, as they suggested CarSales was linked to Honda Motor Co Ltd.

Google argued that it was not responsible for the advertisements, as it was only the conduit for the advertiser.

In a unanimous finding, five judges of Australia's High Court ruled in favor of Google, overturning a ruling from the Federal Court. The lower court had ordered Google to set up a compliance program to make sure paid advertisements on its search engine were not misleading.   Continued...

 
The Google signage is seen at the company's headquarters in New York January 8, 2013. REUTERS/Andrew Kelly