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Online compliance lesson in ACCC Google appeal win

The Federal Court has upheld the Australian Competition and Consumer Commission’s (ACCC) appeal against Google for publishing advertising material designed to mislead or deceive, and legal experts are urging SMBs to recognise how the case provides clear evidence of their online obligations.

This week’s judgment overturns a prior ruling by Justice Nicholas, who last year determined that although some of Google’s online ads were misleading, the fault didn’t lie with the search engine as they were only communicating representations made by the advertiser.

The ads in question appeared on Google search results page and used keywords to lead consumers to rival company websites. The headline of each of the advertisements in question comprised a business name, product name or web address of a competitor’s business not sponsored, affiliated or associated with the particular advertiser and when a user clicked the headline of the advertisement, he or she was taken to the advertiser’s website.

The ACCC alleged that the advertisements contained representations that by clicking on the headline users would find information as to the competitor’s business. The primary judge found that although a number of the advertisements were misleading or deceptive, Google had not made those representations. Google merely communicated representations made by the advertiser. As such, Justice Nicholas ruled that Google had not breached the Trade Practices Act.

The court has now concluded “it is Google’s technology which creates that which is displayed. Google did not merely repeat or pass on a statement by the advertiser, what is displayed in response to the user’s search query is not the equivalent of Google saying here is a statement by an advertiser which is passed on for what it is worth.”

“The ACCC brought this appeal because it raises very important issues as to the role of search engine providers as publishers of paid content in the online age,” ACCC chairman Rod Sims said.

Hall & Wilcox technology lawyer Ben Hamilton said the ruling sets out new compliance obligations for every local business with an online presence.

“Previous decisions suggested that merely providing the platform by which information was distributed did not attract liability…importantly [this] decision clarifies that misleading content can be a responsibility of the online publisher, even if the content originated from elsewhere,” Hamilton said.

“In this decision, the Court was influenced by the degree of interaction between Google’s technology and the web user. This interaction was significant enough for the Court to find that Google’s role in publishing these advertisements was more than a passive one,” he added.

Hamilton suggest some businesses will now need to re-evaluate their online publishing model and give new consideration to processes like moderation. Any SMBs involved with eMarketing should also take note of the decision, he said, and consider its implications on the way they communicate with consumers.

Google has since been ordered to put a consumer law compliance program in plance and pay the ACCC’s appeal costs.