​In yesterday’s Full Federal Court appeal decision, it was unanimously held that Google had itself engaged in misleading or deceptive conduct in relation to a number of misleading advertisements that appeared on its search engine website. 

This proceeding was brought under the old section 52 of the Trade Practices Act 1974 (Cth) (prior to this Act being renamed the Competition and Consumer Act 2010 (Cth) (CCA)). The misleading and deceptive conduct provision is now section 18 of the Australian Consumer Law.

The central issue before the Court was whether Google ought to be deemed liable for the advertisements which appeared on Google’s search pages.  As these advertisements featured key words associated with others without their approval, the advertisements were misleading.  The advertisements had been commissioned by others and Google had received a fee for these ‘sponsored links’.

In particular, this decision would appear to be a significant one for any online content provider or publisher which publishes advertisements that originate from others. The primary judge had found that Google had merely provided the technical facilities for advertisers to place their advertisements on a Google search results page.1 As such, Google had merely passed on representations made by others.  In that sense, Google’s participation in any misleading publication was a passive one.  On this basis, Google was not liable.

On appeal, the Full Federal Court unanimously found that Google’s role in the publication of the advertisements was more than as a mere conduit. 

The role of Google’s technology was a key factor.  In particular, the Court was influenced by the fact that it was Google’s technology which created what was displayed on its search engine site.   In describing the interaction between a search engine user and Google, the Full Court stated that: ‘the enquiry (by the user) 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.’

The extent of this interaction meant that Google was found to be responsible for the publication of the misleading advertisements.

Comment

Where an online publisher publishes advertisements which originate from others and, in so doing, uses technology to interact with a web user to affect that final content, then the online publisher is more likely to be held responsible for that publication.

It would seem to be the case that the more sophisticated the software platform is, the greater the risk.

Whilst the ACCC has said that the decision is significant for Google and other search engine providers which use similar technology to Google, there does not seem to be any reason why this decision is only relevant to search engine providers.

In particular, this decision would appear to be a significant one for any online content provider or publisher which publishes advertisements that originate from others.  The particular circumstances and extent of any involvement in the publication of the advertisement will be highly relevant in determining whether the provider or publisher itself will be liable if the advertisement is misleading or deceptive.

Further, the decision could also be of significance to online content providers and publishers which publish material other than advertisements that originated from others. It cannot be assumed that they could not be liable for misleading material on their websites. However, some providers and publishers may be able to escape liability under the information providers exemption (which is available in certain situations under s19 of the CCA, but not in the case of advertisements).

It is also important to note that the ACCC did not allege that Google had any intention to mislead or deceive.