The High Court has allowed an appeal by Google Inc. (Google), finding that Google did not engage in misleading or deceptive conduct in publishing advertiser sponsored links that were misleading or deceptive.
Background to the proceedings
The Google search engine displays two types of search results in response to a user’s search request; “organic search results”, which are always displayed and are free of charge, and “sponsored links”. Sponsored links are produced, and paid for, by advertisers. Sponsored links are displayed when a search term, entered by a consumer, matches the keywords associated with the sponsored link, which have been selected by the advertiser.
In 2007, the Australian Competition and Consumer Commission (ACCC) commenced proceedings against Google, alleging that Google, as distinct from the advertisers, engaged in misleading or deceptive conduct in breach of the Trade Practices Act by publishing certain sponsored search results, which were themselves misleading. The primary judge found in favour of Google. The ACCC appealed the decision in relation to Google, and on appeal the Full Federal Court found for the ACCC. For further information about these proceedings see our April 2012 Corrs In Brief.
Google appealed the decision of the Full Federal Court, and the appeal was heard in September 2012.
The decision of the High Court
The High Court overturned the decision of the Full Federal Court finding Google did not engage in misleading or deceptive conduct.
Whilst it was accepted that the advertisements were misleading (as the trial judge found), in summary, the High Court found that Google did not author the sponsored links; it only published or displayed them, without adoption or endorsement. In publishing and displaying sponsored links, Google:
- was not “the maker, author, creator or originator of the information in a sponsored link”; and
- did not adopt or endorse the sponsored links.
The High Court reasoned that the technology that lies behind the display of the sponsored link merely assembled the information provided by the advertisers; that Google’s search engine, like any other medium, was merely a means of communication as between the advertisers and consumers.
In addition, the High Court held that an ordinary and reasonable user of the Google search engine would understand that the sponsored links were statements made by advertisers, and Google was merely passing them on. In such circumstances, the Court found that Google did not engage in conduct that was misleading or deceptive.
Practical implications for business
This decision clarifies the role of search engine providers who publish advertisements in response to user queries. Search engine operators are not relevantly different to other intermediaries, such as newspaper publishers or broadcasters, who publish, display or broadcast advertisements of others. To the extent that a search engine provider is merely a conduit passing on information, it will not be engaging in conduct that could amount to misleading or deceptive conduct.