Google, ACCC head to the High Court

Google will take the Australian Competition and Consumer Commission (ACCC) to the High Court, in the hopes of overturning a previous ruling that said it had misled consumers through its advertised search results.

The case centres around sponsored links that appeared in Google search results for online trading company Trading Post and travel booking firm STA Travel.

The ACCC alleged that the headline for an advertisement link in Google's search results often refer to a business name that a person was searching for, even though the advertising links were then redirected to the Trading Post or STA websites. But because the link had no affiliation with the business name being searched for, Google and the Trading Post were engaged in deceptive conduct.

Advertisers select the search terms that they want their advertisements to appear under. Google won the first round of the court case in early 2011, with Justice John Nicholas stating that Google "merely communicated what Trading Post represented, without adopting or endorsing any of it".

However, in April, the full bench of the Federal Court overruled that judgment, stating that sponsored links with the headline of "Harvey World Travel" or "Harvey World" that redirected to the 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 Trading Post, 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."

Google announced it would appeal this decision and, in a special leave hearing before High Court justices William Gummow, Susan Kiefel and Susan Crennan, in Sydney today, the counsel for Google argued that the sponsored link is dictated by the advertiser, and would not exist without the creation and direction of that advertiser.

Google argued that the ACCC was seeking to test the 1978 Universal Telecasters vs. Guthrie case, where a TV broadcaster was found to be liable for the false or misleading statements made by an advertiser on that TV channel.

Google said this wasn't valid because, in its case, the advertiser determines all parts of the ad, including the headline, the link and the associated text; Google has no input, at all. The ACCC countered that in providing the technology to produce the ad, and make the ad appear as a result of a search inquiry, Google had a hand in publishing the advertisement and therefore, bore responsibility with the advertiser for the content of that ad.

In particular, the ACCC called attention to the "blue clickable headline" that would appear at the top of the advertisements, stating that, because this headline would match the user's search inquiry, Google clearly was playing a part in delivering that advertisement.

After hearing both sides' brief arguments, the High Court granted leave to appeal the case.

In a statement, Google welcomed the chance to argue its case before the High Court.

"We are pleased with the High Court's decision to grant our special leave for appeal. Google AdWords is an ad hosting platform, and we believe that advertisers should be responsible for the ads they create on the AdWords platform," Google said in a statement provided to ZDNet Australia.

Google said that the AdWords program is an open platform that is flexible and designed to allow businesses to quickly create and manage campaigns. Any violations of terms and conditions are investigated, Google said.

"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 or policies, we will remove it."

The ACCC said it will provide a statement on the matter this afternoon.