Google ... guilty of engaging in conduct likely to mislead. Photo: Andrew Quilty
Google has been found guilty of allowing four Australian businesses to post misleading and deceptive advertisements on its search engine after a court upheld an appeal by the competition watchdog to have an earlier decision overturned.
The judgment, handed down in the Federal Court this morning by Justice Peter Jacobson on behalf of himself and two other Federal Court judges, means that Google will now have to establish a "compliance program" so that advertisers will not be able to post misleading or deceptive advertisements in the future.
Google said it was "disappointed" by the Federal Court's decision that it should be held responsible for the content of advertisements on its platform. "We believe that advertisers should be responsible for the ads they create on the AdWords platform," it said in a statement after today's judgment.
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It was reviewing its options "in light of the court's decision".
The Australian Competition and Consumer Commission (ACCC) originally lost the court case against Google on September 22, 2011, which claimed that the search giant was engaged in conduct likely to mislead or deceive the public. That decision was then appealed by the watchdog on October 12, 2011.
The competition watchdog brought the legal action against Google and the Trading Post in November 2007.
In judgment papers published today Justice Jacobson, along with Chief Justice Patrick Keane and Justice Bruce Lander, said the primary judge, Justice John Nicholas, in his September 2011 ruling "erred in failing to conclude that Google engaged in misleading and deceptive conduct in four cases".
In one of the four cases it was revealed that between March 2006 and July 2007 Google published ads on its site which were for the CarSales website but which appeared as though they were for Honda Australia. The CarSales ads had a headline which read "Honda.com.au" but instead linked to a web page on carsales.com.au.
The court also found that similar misleading advertisements were posted on Google in three other cases.
ACCC chairman Rod Simms said in a statement that the outcome was "important" because it made clear "that Google and other search engine providers ... will be directly accountable for misleading or deceptive paid search results".
"The ACCC brought this appeal [against Google] because it raises very important issues as to the role of search engine providers as publishers of paid content in the online age," Mr Sims said.
Google was ordered to pay the ACCC's costs.
- With Lema Samandar of AAP
This reporter is on Facebook: /bengrubb
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