Google has triumphed in a High Court case with the Australian Competition and Consumer Commission, in what experts say is a setback for the competition regulator and a loss for consumers.
The ACCC had accused the search giant of engaging in misleading and deceptive conduct over the way it displayed search results. It was specifically targeted for allowing Telstra-owned Trading Post to use the names of two car dealerships in advertisements in order to redirect traffic away from them.
The High Court of Australia held that Google had not contravened section 52 of the Trade Practices Act, which prohibits misleading or deceptive conduct by corporations.
Chief Justice French and Justices Crennan and Kiefel said: “Google did not author the sponsored links; it merely published or displayed, without adoption or endorsement, misleading representations made by advertisers”.
ACCC chairman Rod Sims said the regulator took the proceedings to clarify the law relating to advertising practices in the internet age, however the High Court decision focused only on Google’s conduct.
“It remains the case that all businesses involved in placing advertisements on search engines must take care not to mislead or deceive consumers,” Mr Sims said.
Matthew Rimmer, associate professor in intellectual property at Australian National University, said the decision, along with other recent action by the ACCC over Apple and Facebook, would likely spark a policy debate about whether Australian consumer law should be reformed to better protect consumerrights in the digital economy.
“Google says it is a beacon of enlightenment and truth and access to knowledge, and on the other hand it is this advertising engine which is being used for misrepresentations,” Dr Rimmer said.
“I wonder what this ruling will mean for consumer rights in the digital economy and if in policy terms we need to do more to boost consumer rights to deal with the flood of misleading and deceptive advertising on the internet.”
RMIT senior lecturer Mark Gregory said while the High Court had taken a ‘caveat emptor’ approach in this case, legislation was required to cover the provision of search information.
“I think the ACCC is a big loser, I think consumers are the bigger loser,” he said.
Dr Gregory said while it was fair and reasonable to accept that Google could not control content on sites it linked to, the content on its own sites was under its control.
“There is nothing that happens on Google that Google is not in control of.”
Dr Gregory questioned what rights a consumer had if a link or the information provided by an advertiser was of concern.
“If that link or some aspects of using that link causes loss and liability then there must be a procedure for that link to be removed, paid or otherwise,” he said.
Dr Rimmer said Google might see a different result in ongoing cases that involved trademark law.
“Google has been sued over AdWords internationally in relation to trademark law. It’s a messy situation in terms of international litigation.”
Dr Rimmer said the US [settlement](http://www.reuters.com/article/2012/10/31/us-usa-court-rosettastone-google-idUSBRE89U1GE20121031](http://www.reuters.com/article/2012/10/31/us-usa-court-rosettastone-google-idUSBRE89U1GE20121031) between the Rosetta Stone Inc. and Google in 2012 over trademark law and AdWords was significant.
“The High Court of Australia has been active in the field of internet law and intermediary liability. It has now handed down a trilogy of cases - the Gutnick case on defamation law; the iiNet case on copyright law; and now the Google case on consumer law. Such precedents will be closely watched internationally.”
Further reading:
Warning, digital literacy required: Google wins against the ACCC