GOOGLE is poised to launch a High Court challenge to a Federal Court finding that it engaged in false and misleading advertising, fearing the decision could have global implications for the search advertising market, worth tens of billions of dollars.
The Australian Competition and Consumer Commission was successful last week in appealing against a Federal Court decision that had found Google was not responsible for four misleading advertisements created by advertisers using the company's AdWords program.
The full bench of the Federal Court found "Google is in fact much more than a mere conduit".
"Several features of the overall process indicate that Google engages in misleading conduct," it ruled.
The ACCC win on appeal blindsided the internet giant, which did not believe the appeal would be upheld.
While the company has refused to comment on the ACCC's victory other than to say the decision was "disappointing", sources have revealed that a challenge to the High Court is certain.
"It is the first time that a court has found us to be partially responsible," the source said.
"This judgment has very strong implications for every online advertiser and every online platform.
"It's not only about Google."
Concerned about the impact on the broader online ad industry, Google may seek the support of rivals Microsoft, which operates the Bing search engine, and Yahoo to challenge the ruling.
Celebrating the win, ACCC chairman Rod Sims said the court's findings were a warning to all online advertisers.
"It makes it clear that Google and other search-engine providers which use similar technology to Google will be directly accountable for misleading or deceptive paid search results," Mr Sims said.
"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."
The High Court could be asked to assess the level of understanding of modern digital technology demonstrated by the Federal Court judges.
In fighting the Federal Court case, Google had relied on laws that prevent newspapers, radio and TV broadcasters from being held responsible for the content of false and misleading ads placed by advertisers.
In the original case, relating to ads placed using Google's AdWords software, advertisements purporting to be from companies such as Honda, Alpha Dog Training, Just 4X4 Magazine and Harvey World Travel in search results actually diverted people who clicked on them to websites of rival companies.
Clayton Utz partner Richard Hoad, who has been following the case closely, said the court had originally accepted the newspaper analogy put forward by Google when the case was launched in 2007.
"The full Federal Court decided that the way in which sponsored links are generated and displayed by Google is such that Google, as well as the advertiser, is liable for misleading or deceptive conduct," Mr Hoad said.
"Google is not, said the court, merely passing on the advertiser's advertisement.
"Google argued that its 'terms of use' with advertisers stated that the advertiser was solely responsible for all keywords used, but the court said this did not absolve Google from responsibility."
Google claims that because of the billions of advertisements it serves around the world, it must rely on advertisers adhering to its terms of service, and advertisements found to breach the terms are removed immediately.
"The numbers show we're having success," a Google spokesman said.
"In 2011, advertisers submitted billions of ads to Google, and of those, we disabled more than 130 million ads. And our systems continue to improve: in fact, in 2011 we reduced the percentage of bad ads by more than 50 per cent compared with 2010."
This entry passed through the Full-Text RSS service — if this is your content and you're reading it on someone else's site, please read the FAQ at fivefilters.org/content-only/faq.php#publishers. Five Filters recommends: Donate to Wikileaks.
No comments:
Post a Comment