The High Court of Australia has found that Google is not responsible for the content of third party ads displayed on its search results pages.

The decision

The High Court agreed with the trial judge that it was the advertiser not Google who was legally responsible for the representations in ads displayed on its search results pages, overturning the decision of the Full Court of the Federal Court of Australia.

The Court held that Google did not create the ads that it displayed. Further, it held that ordinary and reasonable users of the Google search engine would have understood that in the circumstances the representations conveyed by the ads were those of the advertisers, and would not have concluded that Google adopted or endorsed the representations. Accordingly, Google did not engage in conduct that was misleading or deceptive.

The majority of the High Court found that it was the advertiser who is the author of the ads and that each relevant aspect of the ad was determined by the advertiser. The majority of the High Court found that Google does not create, in any authorial sense, the ads that it publishes or displays.

The High Court found that Google’s response to a user’s request for information does not render Google the maker, author, creator or originator of the information in an ad. The technology in Google which lies behind the display of an ad merely assembles information provided by others for the purpose of displaying advertisements. To the extent that Google displays ads, the Google search engine is only a means of communication between advertisers and consumers.

In addition, the trial judge’s decision that Google sufficiently distinguished between ads and organic search results remains unchallenged.

The ACCC’s case

The ACCC had argued that Google contravened the consumer protection provisions of the Trade Practices Act 1974 (now the Australian Consumer Law) for its involvement in displaying misleading third party ads appearing on its website because:

  • the ads were Google’s response to a user’s search; 
  • Google’s technology caused the ads to be displayed and allowed the advertiser to cause keywords to be automatically inserted into the ads;  
  • Google decided the layout of ads displayed on its website.

The ripple effect

The case has been closely followed in Australia and internationally as it is an important case on online advertising practices and the responsibility of website hosts for third party posted content. The case also had the potential to impact all publishers of ads and all businesses that pass on or host third party content, such as travel agents, real estate agents and social media platforms. 

The case addresses a number of other important matters relating to the liability of online advertising platforms including that there are no special rules for online advertising as compared with newspapers, television and print.

How did we get here?

The ACCC commenced the proceedings against Google in 2007, alleging that users were misled into thinking that the ads displayed on Google’s search results pages were in fact organic search results and not ads.

The ACCC also alleged that particular ads which had been displayed on Google search results pages were misleading, in that they featured headlines which contained the names or URLs of the advertisers’ competitors. The ACCC alleged that Google, as well as the advertisers, had made certain misleading representations by displaying the ads including that there was a relationship between the advertiser and the competitor which was not the case.

Following a lengthy trial in 2010, the trial judge, Justice Nicholas, dismissed the ACCC’s case. In respect of the first set of allegations, Justice Nicholas held that Google users understood that sponsored links were paid advertisements and were different in nature to organic search results. The ACCC did not appeal this finding.

In respect of the second set of allegations, his Honour held that Google had not adopted or endorsed the third party advertisements and so users would understand the representations conveyed by those advertisements to be made by the advertiser, not by Google. The Court found that users understood that the ads contained messages from the advertisers which Google simply passed on, “for what they were worth”.

The ACCC appealed this second aspect of the case and the Full Court upheld the ACCC’s appeal. The Full Court’s finding was that, in summary, Google created the advertisement. The Full Court also found that the display of the ad was Google’s response to a search by a user, which made Google liable as principal and it was not merely a conduit.

Google appealed to the High Court of Australia. Importantly, the majority of the High Court found that each relevant aspect of the ad was determined by the advertiser and that Google’s response to a user’s request for information did not render Google the maker, author, creator or originator of the information in the sponsored link.