Sponsored links appear alongside your search results and are intended to suggest products or services that will interest you, but which more often than not just look dodgy. And in Google Inc v Australian Competition and Consumer Commission, [2013] HCA 1, they really were dodgy: the sponsored links displayed with certain Google search results took the user not to the site he or she was probably looking for, but to that of a competitor who had signed up for Google’s AdWords feature and paid to have its site come up as the sponsored link. A user who searched for ‘Harvey World Travel’, for example, got a link to that company in the search results, as well as a sponsored link to its competitor, STA Travel. The trial judge found that the individual advertisers who were behind sponsored links of this type had made misleading or deceptive representations under Australian consumer protection legislation, and this finding was not appealed. The question on appeal was whether Google itself was also liable.

The trial judge rejected claims that Google had failed to make a sufficient distinction between the content of the ‘organic’ results of the user’s search and the sponsored links, or had itself made misleading representations. He reckoned that average internet users would know the difference between the organic results and the sponsored links. The Federal Court disagreed, holding that it wasn’t necessary for an intermediary like Google expressly to adopt or endorse someone else’s misleading content and also that Google acted as principal (not conduit) in the display of both organic and sponsored results. Considerable reliance was placed on the fact that the sponsored link contained text which was very close to the user’s original search terms. The High Court of Australia reversed, holding that the sponsored links were generated essentially by the advertisers and not by Google, which would have had difficulty in determining whether any individual advertiser whose name (or name and URL) appeared in the advertiser’s sponsored link was a competitor or associate of the party the internet user was actually looking for.

[Link available here].