Google responsible for misleading and deceptive advertising

A recent decision of the full Federal Court has overturned the earlier decision of a single judge of the Federal Court (discussed here by Certus Legal Group), holding that Google has engaged in misleading and deceptive conduct by displaying misleading advertisements from other businesses on its search results page.

The misleading conduct alleged by the Australian Competition and Consumer Commission was primarily found in ‘Sponsored Links’ appearing on the Google results page. Some of these Sponsored Links were alleged to be misleading as they advertised one business name, but then linked to a competitor’s business name.

The Full Court found that Google was more than a ‘mere carrier’ of the misleading advertisements and instead made the representations itself as it was closely involved in the preparation, creation and approval of the advertisements prior to publication.

This was based on a number of reasons; namely that Google had tight control over the content of results, allowed targeting advertising, and had internal processes that provided for close supervision of key words for advertisements.

As a result, Google’s ‘Publishers Defence’ argument failed, as it could not successfully prove that it did not know or suspect that publishing the advertisements would constitute misleading or deceptive conduct.

Further, it was found that Google’s sophisticated AdWords system, which selects the Sponsored Links, indicated that Google assisted in producing the representations and as such, was responsible for any resulting misleading or deceptive content.

It was also held that as it was the Google system that is searched by users, and the Google system that responds and provides the links, Google was therefore a maker of the misleading representations.

While it is likely that Google will seek leave to appeal to the High Court, this case nonetheless highlights the importance for online publishers to be aware of any potentially misleading or deceptive content they may be displaying on their websites.

For information or assistance in determining your liability for advertisements on your website that may contain misleading or deceptive content, please contact Certus Legal Group.