Australian high court rules on Google advertising case

I wrote this article about allegations of misleading advertising.

In a judgment handed down on 6 February 2013 in Google Inc v. Australian Competition and Consumer Commission [2013] HCA 1, Australia’s High Court (the highest court in Australia) ruled unanimously in favour of Google in a case concerning allegations of misleading advertising.

The matter centred on a Google product called AdWords, which permits an advertiser to pay Google for a “sponsored link” to appear on a Google search results page when a Google user searches for certain terms. The search terms are usually related to the advertiser’s business.

The Australian Competition and Consumer Commission (the ACCC) brought an application in which it sought to hold Google responsible for misleading advertisements on the websites to which the sponsored links direct consumers, and to have the links removed.

The misleading and deceptive representations contained in four of the sponsored links, and the fact that these representations contravene Australia’s advertising law, were not in dispute in the High Court. The only question for the High Court to decide was whether Google could be held liable for the content of these links.

The High Court overturned a previous ruling from the Federal Court, which had ordered Google to establish a programme to ensure that sponsored links are not misleading. The Federal Court had found that certain advertisements breached Australia’s Trade Practices Act and that Google could be held liable as the publisher of these statements.

Google appealed to the High Court, which found that “Google did not author the sponsored links; it merely published or displayed, without adoption or endorsement, misleading representations made by advertisers”.

The High Court considered it important that Google has no control over the search terms that the advertiser chooses, and that the advertiser determines the content of the link. The High Court stated:

“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 in their capacity as consumers of products and services.”

The way that this system works, according to the High Court, means that Google had not “endorsed or adopted a published representation” and was therefore not responsible for that misrepresentation.

This matter is a significant victory for internet service providers, search engines, and potentially other online publishers where users control the content that is published. Users who publish information in this way are often anonymous or difficult to find, which means that where unlawful content is published it is usually easier to pursue the online publisher.

This judgment reinforces the position, which recently also gained some traction in local law, that the user that creates unlawful content should be regarded as the primary wrongdoer for wrongful content on a website.