Last year, we reported that the Full Federal Court had found that Google had engaged in misleading and deceptive conduct by the publishing of sponsored links, a type of advertisement, in response to searches undertaken by users of its site (ACCC v Google Inc [2012] FCAFC 49).  It was held that by its conduct, Google had adopted the content of the sponsored links which were misleading and deceptive.

That decision was recently overturned by the High Court in Google Inc v ACCC [2013] HCA 1. 

Full Federal Court

The case involved four advertisers who had paid for their advertisements to appear as sponsored links above the true results in response to a search carried out on Google’s website.  Advertisers pay for their advertisements to appear in response to various keywords searched on the website which directs user traffic to its web pages.  The keywords are selected by the advertiser with some assistance provided by Google.

The Full Court found that by enabling an advertiser to use a competitor’s name to draw consumers to the advertiser’s own website, Google was not merely a conduit but was itself engaging in misleading and deceptive conduct. 

The falsity of the conduct was that the advertiser’s URL misrepresented a connection or affiliation between the searched term identifying the competitor and the URL of the advertiser.  The Full Court’s view was that it was Google that was responding to the query and telling the searcher that the URL provided was the contact address for information about the searched term, when it was not.  Google’s technology created the displayed result and it was not merely passing on a statement by an advertiser. 

High Court

There was no contention before the High Court that the sponsored links were misleading or deceptive.  The focus was whether Google engaged in misleading and deceptive conduct by publishing or displaying the sponsored links and was not merely passing the information on without any responsibility, thereby being a mere conduit.

The High Court acknowledged that in relation to intermediaries or agents, a key consideration as to whether Google had itself engaged in misleading and deceptive conduct by publishing, communicating or passing on a misleading representation, was whether it would appear to the ordinary and reasonable person that Google had adopted or endorsed the representation.

The High Court found that Google:

  • had no control over the search terms used;
  • results were wholly determined by the keywords and other content in the sponsored link which the advertiser had chosen; and
  • did not create as an author the sponsored link that it published.

This caused the High Court to say:

            “That the display of sponsored links (together with organic search results) can be described as Google’s response to a user’s request for information does not render Google the maker, author, creator or originator of the information in a sponsored link.  The technology which lies behind the display of a sponsored link merely assembles information provided by others for the purpose of displaying advertisements directed to users of the Google search engine….”

            …………

            “Ordinary and reasonable users of the Google search engine would have understood that the sponsored links were created by advertisers.  Such users would also have understood that the representations made by the sponsored links were those of the advertisers, and were not adopted or endorsed by Google.”

Despite the High Court’s findings, businesses which allow advertisements to be placed on their website or which operate a search engine need to be cautious.  Owners of specialist websites in particular should be careful that advertisements or other information provided by third parties are endorsed by the website publisher.  Google operates a generalist website – it does not service or profess expertise in any particular field.  By contrast the website of an industry association might carry advertisements by member and others, and could be seen as adopting the information or representations conveyed.

For specific advice on how to stay within the “Google principle” please contact a member of our team.