In Google Inc v Australian Competition and Consumer
Commission  HCA 1 (6 February 2013) the High Court
overturned a decision from the Full Court of the Federal Court of
Australia that Google was conveying misleading and deceptive
representations in contravention of section 52 of the Trade
The ACCC claimed that particular search results displayed by
Google amounted to misleading or deceptive conduct, thereby
contravening section 52 of the Trade Practices Act 1974.
The Google search engine responds to users' search requests by
keeping an index of billions of accessible web pages, divided into
two categories. When a user 'searches' a search term,
Google displays two types of search results: the 'organic
results' and the 'sponsored links'.
'Organic results' link the user to web pages in order of
relevance to the search terms they have entered, which is
calculated by a complex mathematical formula. These 'organic
results' always appear free of charge.
A 'sponsored link' is a form of advertisement. The
advertiser pays Google a sum of money each time a user selects the
'sponsored link' when it appears in their search. The
'sponsored link' is attached by Google to a list of search
terms pre-selected by the advertiser so it appears on the screen
during a search – this system is known as Google AdWords.
It was not in dispute that some of the 'sponsored links'
were misleading or deceptive, by representing that a particular
company was linked to another when in fact they were competitors.
The question was whether the publication of these misleading or
deceptive 'sponsored links' amounted to misleading or
deceptive conduct on the part of Google.
The Parties' Submissions
The ACCC relied on s 52 of the TPA which stated that:
"A corporation shall not, in trade or commerce, engage
in conduct that is misleading or deceptive or is likely to mislead
In essence the ACCC submitted that Google was the maker or
creator of the 'sponsored links', relying on the fact that
the company had used their technology to display the 'sponsored
links' in response to search requests from users.
The ACCC argued that this established Google's liability
irrespective of the fact that it was the advertisers who were the
source of the content for the sponsored links.
Google submitted that the company had always admitted its
responsibility for publishing or displaying the advertisements.
However, this was insufficient for a finding of misleading or
deceptive conduct under section 52 of the TPA.
Furthermore, Google contended that the author of the
'sponsored link' is the author, creator or originator of
information and that the extent of Google's involvement is an
automated response to a user's search request.
In reaching its decision, the High Court assessed the origin of
the representation and ultimately accepted Google's submission
that the company cannot be described as a maker, author, creator or
originator of information in a 'sponsored link' merely by
displaying the links together with 'organic search
results'. The High Court in this sense drew the analogy between
Google, as a function for displaying advertisements, and other
intermediaries, such as broadcasters and newspaper publishers.
The fact that Google actively offered and arranged a set of
special search terms as part of the AdWords system did not change
the essential nature of its conduct. Google was found in effect to
be only a means of communication between advertisers and
The practical effect of a different finding in this case would
have been potentially significant. Google, along with any similar
service (not necessarily limited to internet search engines) may
have found itself under a positive obligation to test the accuracy
of submitted advertisements, where those advertisements involve
some more 'active' involvement by the publication such as
the AdWords system, prior to publication.
This would impose such a heavy burden on the publisher that
systems such as AdWords may have been rendered impractical in
jurisdictions where laws similar to the Trade Practices
1The Trade Practices Act 1974 has been
renamed the Competition and Consumer Act 2010, effective 1
January 2011, which includes as a schedule the Australian
Consumer Law. Section 52 of the Trade Practices Act
has been replaced by section 18 of the Australian Consumer
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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