Google wins High Court case against ACCC over misleading online ads

The High Court has handed down a decision in the ongoing case between Google and the Australian Competition and Consumer Commission, saying the search engine giant is not responsible for displaying misleading ads made by a third party.

The decision is similar to the iiNet case last year, in which the High Court ruled the internet service provider was not responsible for copyright infringement conducted on its network.

The unanimous decision comes after a volatile court battle between Google and the ACCC, with the search engine winning the first trial and then the competition regulator winning on appeal.

In its ruling, the High Court said misleading sponsored links were displayed by Google, but it did not create them.

“Ordinary and reasonable users of the Google search engine would have understood that the representations conveyed by the sponsored links were those of the advertisers, and would not have concluded that Google adopted or endorsed the representations,” it said.

The decision has a significant impact for businesses, as they can no longer claim Google is responsible for monitoring the millions of advertisements flowing through its network every day.

King & Wood Mallesons technology partner John Swinson told SmartCompany this morning the decision is an interesting and important one, as it provides a ruling for the industry that Google cannot be expected to know if any one ad is misleading.

“The big question here was whether Google was also responsible, alongside the advertiser. And the court said no, saying Google was no different to a newspaper just placing advertisements.”

The case concerned advertisements used by several companies, including Honda and Harvey World Travel. Their misleading activity was by buying up keywords used by rival businesses.

This meant that if a person searched for the word, “Toyota”, for instance, they would still see an advertisement for Honda. It is against Google’s own regulations to create these types of misleading advertisements.

The previous ruling by the Federal Court had said Google is responsible for the advertising because it manages the technology by which those advertisements are displayed.

But Swinson said the High Court took a different view.

“The fact you use Google tools to create the advertisement doesn’t make Google responsible, because it was up to the user to use those tools correctly.”

“Google is not responsible for the user, say, choosing misleading keywords even though Google might have been suggesting something else through its own display ads. The fact the advertiser chose to do that was enough.”

Swinson said the court recognised Google runs millions of ads through its systems every day.

“It’s not going to be a perfect system, Google will be identifying key words that may be inappropriate,” he said, but noted this doesn’t make Google a participant in actually creating and then suggesting misleading ads.”

“The case is very similar to iiNet last year,” he said.

Both cases are forming a view of technology within Australian law suggesting the operator of a platform is not responsible for some of the conduct of its users.