The full bench of the Federal Court has found that Google misled consumers through its advertised search results.
The case centred around sponsored links in Google search results through its AdWords program by online trading company Trading Post and STA Travel. The Australian Competition and Consumer Commission (ACCC) alleged that because the headline of an advertisement link in Google search results often referred to the business name that a person was searching for alone, and then redirected to the Trading Post or STA website, which had no affiliation with the real business, Google and Trading Post were engaged in deceptive conduct.
In his ruling in September 2011, Justice John Nicholas found that while the Trading Post had been misleading in its conduct regarding the advertisements, Google was not engaged in deceptive conduct, as it had merely been the messenger between the advertiser and the consumer.
"Google merely communicated what Trading Post represented without adopting or endorsing any of it," Nicholas said.
Today the full bench of the Federal Court overruled that judgment, stating that Google advertisements with the headline of "Harvey World Travel" or "Harvey World" that redirected to STA Travel website were in breach of section 52 of the Trade Practices Act. Similarly, ads headlined with "Honda.com.au" that redirected to car trading website CarSales, ads headlined "Alpha Dog Training" that linked to The Dog Trainer, and ads headlined "Just 4x4s Magazine" that redirected to the Trading Post website were also in breach of the Trade Practices Act.
"What appears on Google's web page is Google's response to the user's query," the judgment stated. "That it happens to headline a keyword chosen by the advertiser does not make it any less Google's response.
"It is an error to conclude that Google has not engaged in the conduct of publishing the sponsored links because it has not adopted or endorsed the message conveyed by its response to the user's query."
The court ordered that Google must establish and implement a compliance program and ordered Google to pay the ACCC's costs for the trial in relation to the Honda, Harvey World Travel, Alpha Dog Training and Just 4x4 Magazine advertisements, and pay the ACCC's costs for the appeal.
In a statement to ZDNet Australia, Google highlighted that the decision didn't overturn the original ruling that it distinguishes between organic search results and ads but didn't rule out seeking leave to appeal the judgment in the High Court:
"We are disappointed by the Federal Court's decision that Google should be responsible for the content of four particular ads on its platform. Google AdWords is an ads hosting platform, and we believe that advertisers should be responsible for the ads they create on the AdWords platform. We're committed to providing an advertising platform that benefits both advertisers and users. We investigate complaints about violations of our policies and terms and conditions, and if we are notified of an ad violating our terms and conditions we will remove it.
We are currently reviewing our options in light of the court's decision."