Today, the High Court unanimously found that Google Inc. (Google)
had not engaged in misleading and deceptive conduct in displaying
Today's decision in Google Inc v Australian Competition
and Consumer Commission  HCA 1 overturns the Full
Federal Court's finding that Google had engaged in misleading
and deceptive conduct and restores the decision of the trial judge.
The key issue in the three separate judgements (French CJ, Crennan
and Keifel JJ, Hayne J and Heydon J) was the finding of the trial
judge that Google itself had not made the impugned representations
in the sponsored links.
The unanimous decision of the High Court has reaffirmed the
first instance decision of Justice Nicholas that while the
representations were misleading and deceptive, the representations
had not been made by Google. In other words, Google had not engaged
in misleading or deceptive conduct in contravention of section 52
of the TPA. Rather, Google had sufficiently distinguished
advertisers' advertisements contained in sponsored links from
Google's organic search results and therefore misleading or
deceptive representations made in the advertisements were made by
the advertiser and not by Google. The High Court affirmed the
reasoning of Justice Nicholas that ordinary and reasonable users of
Google would realise the sponsored links were advertisements and
the content of them was created by the advertiser, not by Google.
The High Court agreed that Google had merely passed on the message
from the advertiser to the consumer.
Today's decision has overturned the (also) unanimous
decision of the Full Federal Court, which had found that Google was
responsible for the advertisement as it was 'much more than a
mere conduit' by generating the sponsored link in response to
particular search queries.
In reaching today's decision, each judgment of the High
Court determined that the misleading and deceptive advertisements
were those of the advertisers and not Google. Heydon and Hayne JJ
stated that the Australian Competition and Consumer Commission had
failed to establish its central allegation that Google had made the
representations conveyed by the advertisements.
The decision is significant in that it provides some comfort to
online providers such as Google that they are not likely to be
found to have engaged in misleading and deceptive conduct, provided
that they distinguish their organic search results from
advertisements. If Google had failed in this regard, Heydon J in
his judgement today stated that the limited defence offered to
information providers by section 65A TPA (now section 19 of the
Australian Consumer Law (ACL)) would probably have been
unavailable to Google in this instance, though the majority of the
High Court chose not to address this issue.
Nonetheless, advertisers must remain vigilant about how they use
AdWords in light of the decision at first instance in which the
Trading Post was found to have engaged in misleading or deceptive
conduct. The Trading Post paid Google to ensure that 'Kloster
Ford' or 'Charlestown Toyota' search terms would
generate sponsored links to the Trading Post's website. The
Trading Post was found to be in breach of sections 52 and 53 of the
TPA (now sections 18 and 29 of the ACL) for falsely representing an
affiliation with 'Kloster Ford' and engaging in misleading
or deceptive conduct.
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