Google Triumphs over ACCC in High Court Battle

Updated in July 2019 with a revised source.

Ending a six-year legal battle, Google has finally been cleared of the alleged engagement in misleading and deceiving conduct over sponsored links. Had Google lost the case, linked advertising would have been badly affected, thus the main source of revenue of the Internet search giant would have been jeopardised.

The consumer watchdog, the Australian Competition and Consumer Commission (ACCC) had alleged that sponsored links for the keywords Harvey World Travel, Honda and Alpha Dog Training that had been published by Google in 2006 and 2007 misled consumers to rival companies (Carsales.com.au among the others).

What was surprising was that the High Court unanimously ruled in favour of Google, where the Federal Court was against Google and stated that Google had been misleading consumers by publishing those links.

Kenneth Hayne (High Court judge) said that the submission put forward by the ACCC was “unacceptably extreme,” and had it been accepted, Google would have had to check every single ad link it publishes.

On the other hand, the ACCC defended the High Court decision and warned businesses placing ads online not to misinform consumers. When asked why the proceedings were brought, Rod Sims, ACCC Chairman, said because it was necessary to clarify the law regarding advertising practices online. He also said that the High Court did not dispute the misleading sponsored links.

However, the High Court was convinced that the ordinary reasonable consumers would have understood the sponsored ads were not created by Google per se rather they were just representations of advertisers. The High Court reached this decision even though the ads were created by Google’s tools and served up by Google.

The ACCC stated that it would review the High Court judgment to make sure if there are further complications or implications regarding the decision and the Australian Consumer Law (2012).

A spokesman from Google said that the company welcomed the decision the High Court reached and also thanked the High Court for understanding that Google cannot be liable for sponsored ads on SERP that only advertisers create.

Source: Sydney Morning Herald